In Florida, bonds are required on all public construction projects over $200,000, per Section 255.05 of Florida Statutes. Bonds are especially important in this case because subcontractors and suppliers cannot lien public property due to sovereign immunity.
There are a few types of bonds that construction and service contractors may encounter on public works projects and some commercial projects.
Provides financial assurance that the bid has been submitted in good faith and the successful bidder will enter the contract at the price bid and provide required performance and payment bonds. The bid bond is also referred to as a bid security or bid guarantee. Bid bonds are a tool used by Owners to pre-qualify bidders because they appreciate the strict underwriting involved in the surety approval process.
Performance and Payment Bonds
The Performance Bond protects the owner from financial loss if the contractor fails to perform per the plans, spec and contract. The Payment Bond assures the Owner that the contractor will pay certain workers, subcontractors, and suppliers.
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