Bonds

Insurance Bond Services

Get the Bonds That Are Right for You

Whether the materials and labor you need will be covered or the obligations at work are met, bonds are the most effective way to ensure your venture or project runs smoothly. Reach out to the experienced agents at Lovins Insurance to help you choose the bond that'll be the most beneficial one to you.

Learn More About Our Bond Options

Bid bonds - Guarantees that a contractor must provide all other performance bonds and assures the project owner that the contract will be fulfilled at the stated bid price
Construction bonds (sometimes referred to as contract bonds) - Considered to a portion of performance bonds. Protects the project owner by ensuring the completion of the contract
Maintenance bonds (sometimes referred to as warranty bonds) - Ensures that contractors will use quality material and provide quality workmanship. Bonds operates for an agreed-upon length of time after completion and protects against faulty work
Payment bonds - In case of contractor default, ensures that their obligations to suppliers, workers, and subcontractors are fulfilled
Performance bonds (considered a type of surety bond) - Insures project owners against numerous forms of contractor failure to complete certain responsibilities. This includes performance bonds such as supply bonds, payment bonds, maintenance bonds, construction bonds, bid bonds, and site improvement bonds
Supply bonds - Guarantees that a supplier will provide certain agreed-upon materials and supplies. Protects the purchaser from loss if a supplier does not fulfill their obligations

FAQs

How do bonds differ from insurance?

Traditional insurance is designed to compensate the insured against unforeseen adverse losses. A surety bond is designed to prevent loss by ensuring an obligation is fulfilled. Since a bond is underwritten with no expectation of loss, the premium is primarily a fee for prequalification (underwriting) services.

What is a contract bond?

A contract bond is a legal document(s) used primarily for construction projects and represents a three-party agreement in which the surety company guarantees to the obligee (owner) that the principal (contractor) will fulfill a contract (performance bond) and pay for their material and labor costs (payment bond). The result is a transfer of construction risk from the owner to the surety company, thereby prevents a loss to the owner. Contractors typically include the bond fee (premium) in their job cost estimate and are reimbursed by the owner for this expense.

What are commissions for contract bonds?

Commissions for contract bonds start at 25% but can go higher. Establishing a new contract bond account requires that the agency gather and submit detailed information to the underwriter. The agency also sees all bid and final bonds are issued and gathers updated information as needed throughout the year. Because these accounts require ongoing attention, the payoff is the higher commission, which is earned each time a final bond is written. Commissions for non-contact surety bonds start at 30%, though they're slightly lower for fidelity bonds.

Who benefits from contract bonds?

Owners, lenders, taxpayers, contractors, and subcontractors are protected because the contractor has undergone a rigorous prequalification process and judged capable of fulfilling the obligations of the contract. The U.S. government and most local jurisdiction require contractors to obtain surety bonds.

What are the common types of contract bonds?

The bid bond provides financial assurance that the bid has been submitted in good faith and the contractor intends to enter into the contract. The performance bond protects the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions. The payment bond assures that the contractor will pay certain workers, subcontractors, and material suppliers. There is no fee / premium for a bid bond. Performance and payment bonds are typically issued together and the premium is usually based on the contract amounts so there's not a separate charge for both bonds.

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