Warranty and Performance Bonds for landscaping businesses

Overview

If awarded the contract for a job, the principal (the landscaper, tree trimmer, lawn care specialist, etc.) must usually provide a performance bond. A performance bond is a contract bond guaranteeing that a contractor’s work will be completed according to plans and specifications. If the contractor defaults, the surety will be responsible for completing the work or paying the damages to the obligee. In some cases, a surety will find that its principal is in danger of defaulting before work actually halts. Depending on the circumstances, the surety may take steps to help the contractor complete the work, such as lending money to the contractor, guaranteeing bank credit, or providing consultation services.

Performance Bond:

The Obligee is the property owner or party having the work done.
The Principal is the contractor doing the work.
The Surety is the party, usually an insurer, which guarantees to the obligee that the principal will fulfill his duties outlined by the contract, permit or law.
The Guarantee is the contract work will be performed by the contractor according to plans and specifications.

Agent Articles


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