What are contract bonds?
Vermont contractors take on significant responsibility when they begin projects, and customers can sustain financial losses if contractors fail to complete projects. Contract bonds may provide assurance that customers will be compensated if a contractor fails to deliver as promised.
Contract bonds are specialized surety bonds that normally provide financial compensation if a contractor doesn’t follow through with a project. Several different contract bonds are available.
Who in Vermont needs contractor bonds?
Vermont contractors who work on larger projects may be required to purchase contractor bonds. Commercial construction companies, large residential developers, and roadwork companies might need them.
These bonds can also be purchased by tradespeople, general contractors, home builders, contractors who remove hazardous materials and utility construction companies.
What types of contractor bonds are available?
Contractor bonds can be specialized according to the type of company that purchases them.
For instance, general construction, utility construction, road construction/paving, bridge construction and environmental construction bonds are all slightly different. So too are subdivision bonds, supply performance bonds and sub-trade bonds.