Construction projects require a number of different surety bonds for a number of different purposes.
A maintenance bond is one of the more common bonds you will bump into as you accept more construction projects in your career.
In this short article we'll focus on maintenance surety bonds.
- What is a maintenance bond
- Why it's required
- The circumstances where it's difficult to obtain
What is a Maintenance Bond?
Once you win the bid on a project, you'll learn all of the contract bond requirements.
This almost always includes the two most common construction bonds, the performance and payment bond.
Learn what a performance bond does in construction and when you're ready we can help you learn how much your performance and payment bond will cost.
A maintenance bond, also called a warranty bond, is required when you as the contractor are required to provide maintenance on a completed project.
In most cases it's required to remedy any project defects and issues that arise as the project gets used or to help ensure fragile elements remain intact.
Think of it this way, this maintenance bond is required to hold the construction company accountable to the workmanship provided to complete the project. It's essentially an insurance policy on the work itself.
What makes this bond different from a traditional insurance policy and something like contractor license bond is it has a timeframe. Maintenance surety bonds will have a set timeframe at which point the bond expires and the contractor no longer is responsible for the completed project.
When is a Maintenance Bond Required?
Maintenance bonds are almost always required on government construction jobs and sometimes on a private construction job.
Public Construction Projects
The bidding process for public construction jobs is highly competitive. A government entity is under pressure to ensure the tax money spent on public construction projects is spent wisely.
The maintenance bond gives an added layer of protection that the end product will fulfill its promises.
Private Construction Projects
Private projects may or may not require a maintenance bond. Traditionally, they are not as common in the private sector as they are in the public sector.
What You Need To Know About Maintenance Construction Bonds
Most maintenance bonds last one year from the completion of the project.
If you're being required to purchase a maintenance bond that lasts longer than 2 years, this is when it becomes difficult to secure the bond.
A surety, the insurance company that underwrites maintenance bonds, does not want to have exposure to future claims over two years. When you think about it, that is a long period of time to be liable for a completed project.
A common example of a project that may require a longer bond term are large landscaping projects.
For example, bonds can be required on large trees planted for a common area or park. It's important to ensure the plants and/or trees were properly installed and that they take so they don't die within the first few months of the project opening.
We Are Ready To Help You Obtain Your Maintenance Bond
Just like a performance and payment bond, you will know if a maintenance bond is required for a project during the bid process.
One some projects this requirement can be rolled into the performance bond.
It's during the bid process, when you're obtaining your bid bond, that you will also get approved for your performance, payment and maintenance bond.
If this is your first time you're bidding on a project, learn about the bid bond process.
If you need a maintenance bond, complete our online quote for and tell us about your project and the requirements of the bond. A bond specialist will email and call you almost immediately to help you obtain pricing so you can make the right decision for your project.
If you prefer to speak directly to a bond specialist, call 1-800-608-9950.
