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Explaining Surety Bonds

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What is a Surety bonds?

If you ever tried googling the word Surety bonds you will be overwhelmed by information that would take you several hours to read in order to understand the process.  Here is a video that gives you a simple explanation. 

  • Starting off the video tells you the commercial contractors working for the federal government or the state will need to post a surety bond because of the Miller Act.  If your contract is over $150,000 in size you are legally required to post a payment and performance bond on federal projects. The Little Miller Act requires you to post a payment and performance bond on state project. Each state has their own contract size threshold on when they will require you to post a surety bond. Here are some examples of owners you might work for and when you would need a surety bonds:
    • GSA
    • US Army Corps of Engineers 
    • DOT 
    • Some General Contractors 
  • Before you spend hours trying to understand surety bonds, here is an easy explanation.  A surety bond works the same way as when you co-sign for someone on a car loan. If you don’t pay for the car then that person will have to pay on your behalf. When you get a surety bond then then you are telling who ever you are working for that if you don’t finish the work or pay your bills the surety will. 

Contact us at District Bonding  for all your surety bond needs, bid bond, payment bond and performance bond needs. Work only work on bonds and have markets specifically for helping contractors get approved for a bond when they have been otherwise turned down.  

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