Applying for a Contract Bond is a time consuming project. For new contractors, it is helpful to have an overview of the basics. Contract surety bonds guarantee that contractors will honor a contract for a construction project and that they will pay subcontractors, laborers, and material suppliers as agreed.

There are three basic types of contract surety bonds.

·        A bid bond guarantees a contractor will complete a project at the bid price.

·        A performance bond protects an owner from financial loss should a contractor fail to work in accordance with the terms and conditions of the contract.

·        A payment bond ensures that a contractor will pay subcontractors, laborers and material suppliers.

Sureties underwrite contract bonds based on an evaluation of a contractor’s business. The surety must be satisfied that a contractor runs a well-managed, profitable enterprise and meets obligations in a timely manner. They consider the following:

·        Ability to meet current and future obligations

·        Experience matching the contract requirements

·        Availability of the equipment needed to do the work or the ability to obtain it

·        Financial strength to support the work program

·        Credit history

·        An established bank relationship and line of credit

·        References.

Surety bond premiums vary from one surety to another, but can range from 0.5% to 2% of the contract amount, depending on the size, type, and duration of the project and the health of a contractor’s business. Typically, there is no direct charge for a bid bond. In many cases, a performance bond incorporates the payment bond and a maintenance period.

The contractor includes the bond premium amount in a bid and the premium generally is payable upon execution of the bond. If the contract amount changes, the premium may be adjusted for the change in contract price. Contract surety bonds protect public owners, private owners, lenders, and prime contractors from the expense of contractor and subcontractor failure.

The Surety Group was founded in 1977, specializing in contract surety bonds for the construction industry. We are one of the few agencies in the US with bond agents who work exclusively on contract surety. Have a question? Call us at 800-486.8211.

Someone called today and asked what a DME bond is?  A DME bond is a Durable Medical Equipment Bond that has been approved and signed into law by the federal government.   

DME stands for durable medical equipment. These are devices, like wheelchairs, that Medicare provides for home health care. Suppliers of this equipment must purchase a surety bond each year. It is a government requirement. A DME Surety Bond, or a DME Bond, serves as a guarantee that a DME supplier will operate their business in accordance with government regulations. Find out more about DME surety bonds on our DME Bond Program page or Apply Now Online.

Here are a few things to keep in mind when you are choosing a bond provider. You may get a better rate working with a surety agent versus an insurance agent because they specialize in underwriting surety bonds. If you have bad credit, finding a surety agency that works with a large group of sureties may help you get approved. If you need a bond quickly, find a surety agency that has in-house authority. This means that they can approve your bond without sending it to a surety to review and approve. The Surety Group has in-house underwriting authority and works with dozens of sureties.

Durable medical equipment (DME) includes instruments and products used primarily to improve the quality of life of patients with injuries or illnesses. The products support services like home respiratory therapy, diabetes care, and patient mobility. There are over 100,000 businesses in this segment of the healthcare industry. 

The U.S. DME market reached $26B in 2010 and is projected to reach $31 Billion by 2013, according to a report recently featured at marketresearch.com entitled, "Durable Medical Equipment: U.S. Market Size, Segments, Growth and Trends.” The report discusses each DME category and provides a detailed analysis of home respiratory therapy and patient mobility.

For more information, visit http://www.marketresearch.com/product/display.asp?ProductID=6221618