Maintenance bonds show construction project owners that the contractor is dedicated to the quality of their work. A maintenance bond guarantees to the owner that the contractor will remedy any problems that occur during a specified time period.
What Is A Maintenance Bond?
Sometimes called warranty bonds, a maintenance bond is a type of surety bond that protects the owner of a completed construction project for a specified time period against faults and defects in workmanship, materials, and design that could arise later if the work was done incorrectly.
Maintenance Bonds vs Performance Bonds
Maintenance and performance bonds both relate to the work done on construction projects. A performance bond guarantees that the project will be done according to the contract’s terms and schedule. A maintenance bond guarantees the contractor will remedy any problems related to workmanship, materials, or design. Contractors can acquire both maintenance and performance bonds at the same time. Additionally, contractors can acquire payment bonds to guarantee they will appropriately pay subcontractors and suppliers.
How Much Does a Maintenance Bond Cost?
Maintenance bond cost is a percentage of the bond amount. The surety will determine that percentage based on a number of factors, including the:
- Amount of coverage required
- Principal’s experience in the construction industry
- Principal’s financial records (financial statements, including income statement, cash flow statement, etc.)
- Principal’s credit score
The higher a contractor’s credit score, the lower the bond premium will be. Typically, those with an excellent credit score can expect a premium of 1% to 4% of the total bond amount.
Why Choose Brunswick Companies
Brunswick Companies’ surety bonding specialists guide clients in the construction industry through the process of obtaining a bid bond and other contract bonds.
Our clients receive:
- Fast, responsive and knowledgeable service
- Access to a wide selection of surety providers
- Competitive rates on all types of surety bonds
- Guidance through the process of obtaining surety insurance
- A proactive approach to improving your access to surety credit
- Assistance with specialized surety bonding needs
Great Rates on Maintenance Bonds
Working with an experienced surety broker provides an edge in obtaining the best pricing. Mark Levinson, Senior Vice President of Surety, has developed strong relationships with the leading surety bond underwriters to provide our clients with access to more favorable terms and conditions.
We work closely with our clients to increase their bonding capacity while staying in line with their expectations for business growth.