At Pinnacle Surety, we use our expertise to get our clients approved for construction bonds, so that they can expand their business and win new construction projects.
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We also ensure that principal contractors are given the chance to secure the best performance of work bonds as a prerequisite for the financial and logistical security of their project.
Performance Of Work Bonds
The truth is that construction can be a risky business. For this reason, it’s no wonder that public construction projects will require completion bonds for construction to protect them against financial loss should a contractor default financially, or fail to deliver on their contracted expectations.
Yet more frequently, completion bonds for construction are being required by private firms and their general contractors, too. It’s not hard to see why.
Of all the subcontractor performance bonds, payment and performance bonds for construction are known to be the most reliable and commonly used. They usually take shape after bid bonds are secured by a responsive contractor willing to perform the work at the most reasonable price. At Pinnacle Surety, we specialize in helping firms achieve that.
Construction Bonds For Public Or Private Projects
It’s not hard to understand why general contractors working for public or private projects need not only handle incredibly complex logistics but learn how to manage risk to the best of their ability.
They simply cannot be responsible for all risk and all liabilities coming their way when working with so many independent variables. As such, surety companies like Pinnacle Surety exist to provide that second level of projection, making sure that the best contractors are vetted, and that lucrative contracts go to the right contractors.
As such, small construction businesses, large construction businesses, and public institutions can rely on surety companies to provide that crucial extra level of insurance. Should defaults take place, it’s up to us to secure reimbursement, and to fund a project in order to keep it going as per the stipulations in the performance bond.
How do performance at work bonds take shape?
Performance bonds are legally binding contracts where a bonding company, known as the surety (that’s where we come in), will guarantee a project owner known as the obligee, that said contractor securing the bond will meet all the conditions stipulated in the contract.
This means that if a contractor fails to deliver, defaults, or incorrectly performs the work, then the obligee is legally entitled to seek compensation from the surety, which will then work to recuperate that cost from the principal contractor. Performance of work bonds often stipulates that the surety will then find an alternate contractor to complete the work, using their unique ability to secure contract bonds, construction bonds, and labor and material bonds to achieve exactly that.
Sometimes, a contractor will require performance bonds from their subcontractors, which could be mandated by a general contractors bond company. This is generally considered worthwhile especially if said contractor has a large stage in the construction project itself.
Subcontractor default insurance will also protect a general contractor from losing funds should a subcontractor default during the scope of the project. This way, the project can find an alternative as quickly as possible and return to normal planning with no financial loss incurred.
On-demand vs. conditional performance bonds
On-demand performance bonds will release a certain amount of money that can be accessed on-demand (via a written request), without needing any additional preconditions, such as establishing the liability or failure of the contractor.
Conditional performance bonds, on the other hand, require that a client will provide thorough evidence of suffered losses and the failure of a contractor to meet the terms and conditions set in their contract.
These two types of contract performance bond provide worthwhile security without causing too much damage in the way of logistical planning and the need for endless bureaucracy when projects need to be delivered.
What’s the difference between performance bonds and payment bonds?
Advance payment bonds may seem similar to performance bonds but there are crucial technicalities that differentiate them.
A performance bond will provide an employer with an immediate cash sum should a contractor fail to commit to the task at hand, while the advance payment bond will be used to provide that security when a large deposit is a necessity.
For example, a payment bond may be required by an employer to protect themselves against the non-delivery of a larger order of raw materials necessary for the project. As the raw materials may be used as a necessary element of the work provided by a contractor laboring under a performance bond, it’s not hard to see why the two are sometimes mistaken.
Why use Pinnacle Surety for your construction bonds?
We work hard to secure the best construction performance bonds so that contractors have a higher chance of being noticed and to successfully process the correct insurance shortly after winning a bid.
This way, Pinnacle Surety has gained a common reputation as one of the best bond companies for contractors and project owners alike.
From private insurance packages to construction surety bonds for public projects, our free quote and fast approval method makes the process simple to deal with, providing confidence and comfort to contractors trying to plan their project with care.
Over 30 years of experience!
Our decades of experience has taught us that every level of the construction process must be protected for reputations to grow, projects to complete on time, and companies to trust one another.
As a surety company willing and able to transfer the liabilities from general contractors and provide worthwhile bid bonds and performance contracts for small contracting firms, it’s no wonder that our ability to connect businesses with the skills and trades they need for a successful project conclusion has kept us going all this time.
Pinnacle Surety is committed to long-term successful client relationships. You can view our testimonials here.
What are you waiting for? Contact us today.