What is a Payment Bond and What is a Performance Bond in Florida Construction?
Jacksonville, Florida, construction law firm Regan Atwood has handled performance bond claim disputes and payment bond claim disputes that occur in construction projects in Florida since 2006.
Florida contractors, subcontractors, suppliers, laborers, and design professionals deserve and are entitled to payment for work completed.
Florida public and private project owners and managers are entitled to contracted performance by construction professionals hired.
What is a Payment Bond and What is a Performance Bond?
What is a payment bond? A payment bond is a surety bond established by a prime contractor to guarantee that everyone on a construction project will be paid including laborers, suppliers, and subcontractors.
A payment bond is a substitute for a lien against a property. Claims of lien and payment bond claims are both about protecting a contractor’s or a supplier’s ability to get paid.
What is a Performance Bond in Construction?
A performance bond is a surety bond that guarantees a government client of quality work, budget adherence, and timely delivery of the agreed contractual deliverables.
If a general contractor fails to follow the terms agreed upon in the contract, the government client can recover compensation from the performance bond provider.
The performance bond is provided by a bank or an insurance company to make sure that a contractor completes a project for a public or a private entity.
The critical condition needed for a performance bond is collateral property or investments that can back up the requirements of the surety agency.
Surety companies are divisions or subs of insurance companies. State insurance departments regulate insurance policies and surety bonds.
Surety Bonds
A surety prequalifies a contractor based on financial strength and construction expertise. The bond is underwritten with the least amount of loss.
Jacksonville, Florida, construction law firm Regan Atwood is a 2020 U.S. News & World Report Best Law Firm for its work in construction law.
