Payment Bond Information
Payment Bond Guide
Whether your company needs a small or first-time bond, or a large bonding program, we have the tools to develop a program for your company's needs. At Crane, we've written bonds for contracts less than $10,000 and those for contracts exceeding $150,000,000 and various points in between.
As your company grows, we will be here for you, building your bond program in step with your vision for your business.
Parties to the bond
A surety bond is a three-party instrument
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The Principal (This is you) - The person or business with an obligation to perform.
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The Obligee - The person, company or governmental entity requiring the bond.
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The Surety - The insurance company providing the bond
Purpose of the Payment Bond
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The payment bond assures the Obligee that the principal will pay specified subcontractors, laborers, and material suppliers on the project.
Payment Bond Amount
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Because the payment bond guarantees the construction contract, the amount of the bond is typically equal to the contract value.
Have a question? Need a bond?
Verify your Payment Bond - Fraudulent bonds are prevalent! Make sure you are buying a real bond.
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Several resources are available to ensure your bond is from a legitimate source. You may contact your state’s insurance department to verify that the surety is a legitimate company, licensed to issue surety bonds in that state; you may review the U.S. Department of Treasury’s List of Approved Sureties Department Circular 570 (for federal projects); and you also may verify the strength of the surety company through a private company such as A.M. Best, which issues financial strength ratings that measure the company’s ability to pay claims. You should undertake these steps to verify your bond protection early, preferably before signing the contract or paying for the bond.
Payment Bond Term
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The term of the bond equals the construction contract. Typically, action must be brought no later than one year after the day on which the last of the labor was performed or material was supplied by the person bringing the action.