Infographic: Types of Construction Bonds

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The Infographic, “Types of Construction Bonds,” explains the different types of bonds used in construction projects across the US. In addition to identifying the different types, the infographic explains their purpose and why they are useful in the construction industry.

Construction Bond is a commonly used name for a type of surety bond that protects the obligee (the project owner) by ensuring the principal (the contractor) fulfills the terms of the contract. If the principal does not fulfill their obligations, the surety company will compensate the obligee according to the terms of the surety bond.

This Infographic categorizes the different types of construction Bonds into 3 types. The first type is bid bonds, which protects the obligee if the principal fails to honor their bid. The second type is performance bonds, which protect the obligee related to the terms of the project. The third type is payment bonds, which guarantee all payments to sub-contractors involved in a project. To learn more about construction bonds, refer to the infographic below.

Infographic: Types of Surety Bonds

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The Infographic, “Surety Bond Companies: Types of Surety Bonds,” explains the various types of surety bonds and why they are useful.

One of the primary purposes of a surety bond is to protect project owners when hiring a contractor. The process usually begins when the project owner opens their project open for bidding. The contractor files for a Surety Bond from a surety company to assure the obligee (the project owner) that they have the resources available to complete the project.

If for any reason, the project is not completed according to the terms of the contract, then the obligee will be compensated for the amount promised in the Surety Bond. For more information on the process, refer to the infographic below.