Contract Bonding & Surety Bonds

What is contract/surety bonding?

A contract bond – or surety bond – is not actually ‘insurance', but rather a guarantee between a surety (someone who agrees to be responsible for the debt or obligation of another), a contractor, and a project owner. The agreement binds the contractor to comply with the terms and conditions of a contract. If the contractor is unable to successfully perform the contract, the surety assumes the contractor's responsibilities and ensures that the project is completed.

What instances require contract bonding or a surety bond?

There are many instances where it is wise to opt for surety bonding. Two such examples are:

When a contractor is constructing on a site according to contract specifications stipulated by the owner
When a firm is supplying goods within a pre-determined time frame for a third party

Del Fisher Insurance specializes in helping Alberta contractors fulfill their contract bonding, or surety bond, requirements. Many millions of dollars are spent annually in Alberta on public work construction projects, including thousands of small to medium-sized jobs, which can be successfully handled by smaller contractors. Our markets can promptly underwrite your company's application and let you know your bonding capacity.

What does contract bonding mean to the contractor?

The bid bond guarantees that the contractor that bids the job will enter into the contract and supply the performance and payment bonds as required.

The performance bond guarantees that the contractor will perform according to the terms of the contract.
The labor and material bond guarantees that employees, subcontractors and suppliers that perform work or supply material to the project will be paid.

What does it take to get surety bonded?

There are a few things that Del Fisher Insurance takes into consideration when issuing a contract bond or surety bond:

Character: What is the character of you and your business? What is your reputation with your customers and associates?
Capacity: This represents your company's ability or capacity in manpower and expertise to tackle the job you want performance bonded.
Capital: Do you have the financial strength to effectively run all of the work you have in progress and plan to start?

Contract bonds and surety bonding are one of our specialties at Del Fisher Insurance. Contact us for more information, or request a contract/surety bond quote using our online form.