There are thousands of unique Commercial Contract Surety and Construction Bonds available to qualified parties. In its purest form, a surety bond is a contract between three parties (at least) where one party agrees to pay a sum certain in the event another party fails to comply with the contract requirements.
License and permit bonds are typically required by a municipality or other public body as a condition to granting a license or permit to engage in a specified activity. This type of bond is a guarantee that the party seeking the license or permit will comply with applicable laws or regulations. These bonds can also be structured to provide indemnity guarantees to third parties who sustain injury or damage as a result of the obligor's activities as described in the license or permit when such a guarantee is required. For example, businesses that hang signs over public sidewalks may be required to provide indemnity guarantees for injuries to pedestrians.
The Federal Government and all 50 states set certain bonding requirements with respect to public construction projects. The requirements are often embedded in the procurement codes for public contracts and contain specific and detailed stipulations with respect to the types of contracts the law applies to, the types and size of bond(s) required, who is eligible to make a claim on the bond, notice requirements for making a claim, the statute of limitations on filing a claim, and whether the act allows for the recovery of interest on the amounts claimed, as well as attorneys' fees incurred in bringing the claim.
Our Construction Services bond offerings include:
- Bid bonds reassure project developers that bidders have the capability to accept and implement the job if offered. If the selected contractor declines the job or erroneously withdraws the bid, the project developer can make a claim on the bond to recover the difference between that bid and the next-highest bid.
- A performance bond guarantees the faithful performance of the contract. They are typically required by federal, state, and local governments in conjunction with work on public projects. Should the contractor fail to construct the buildings per specification, the client will be compensated for any monetary damages by the surety company issuing the bond.
- A payment bond guarantees laborers (such as suppliers and subcontractors) are financially secure even in the event of a contract default. As with all surety bonds, should the contract be defaulted and laborers cannot be compensated, it is the surety company’s responsibility to reimburse them. The surety company will then seek damages from the bond purchaser, also known as the principal.
- Supply bonds mandate that suppliers provide materials, equipment and/or supplies as defined in purchase orders. If the supplier fails to provide the supplies as agreed, the bond amount can be used to reimburse the purchaser for the resulting loss.
This material does not amend, or otherwise affect, the provisions or coverages of any insurance policy or bond issued through Foster Sullivan Insurance Group, LLC or its carrier partners. It is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. Availability of coverage referenced in this website can depend on underwriting qualifications and state regulations.
Foster Sullivan Insurance – Protecting Your Future

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Foster Sullivan business clients are small to mid-sized, privately held companies who would rather focus on revenue generating activities than they would insurance related issues. They surround themselves with trusted advisors who assist them in ensuring the safety and well-being of their employees, their clients and their property.
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Foster Sullivan has a team of proactive, responsive, accessible account managers and agents who know you, your business and your industry. We couple that with a specific, continuous service program throughout the policy year.
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