Project owners face multiple risks that should be protected against. One of those is a default by the contractor. Anytime the owner goes into business with a contractor, they should obtain a surety bond in Maryland. This will ensure that if the contractor defaults, the project owner will be properly compensated for the job either through financial reimbursement or by finding another contractor to complete the work. There are four types of surety bonds that any project owner should know about.
- Ancillary Bond – This ensures that the requirements laid out in the contract that do not relate directly to the performance are completed.
- Bid Bond – This ensures that a bidder will join the contract in order to provide payment or performance bonds.
- Payment Bond – This ensures that any subcontractors and suppliers receive payment for the work that they have done directly under the contract.
- Performance Bond – This ensures that the terms and conditions are met and that the contract will be completed upon those terms.
Whether you are the project owner of many different projects, or if you tackle one at a time, it is important to have a surety bond in Maryland. Contact a bond agency today to find out what you need to do to get proper protection for the contract you are about to enter into so that your project will get done properly and on time.