“We would highly recommend Metayer Bonding Associates to any contractor looking to improve upon their present bonding arrangement.”

STEVE MOUNT, Chief Financial Officer
J.T. Magen & Company Inc. NYC
ENR Top 400- #60
“Our company designs and builds food processing facilities. Mike and the entire staff at Metayer Bonding Associates understands our specialized business.”

JOHN LAPINSKI, CONTROLLER
The Dennis Group
Springfield, MA
ENR TOP 400 CONTRACTORS – #217

“Mike has always been able to work with us and his bonding underwriter so that we have never been refused a bond for any project that we felt capable of handling.”

JEFFERY CLEMENT, PRESIDENT
Modern Mechanical Systems, Inc.
Farmington, CT

“Mike at Metayer Bonding Associates has covered our bonding needs since our company’s inception. Mike and his team have a can do attitude. We know we represent a very small portion of Mike’s business, but we feel like his most important customer. They understand the construction industry and our specific needs for bonding. We recommend Metayer Bonding Associates to anyone wanting to significantly improve their current Bond Program”

Donal McIntyre, President
Wesbuilt Construction Managers LLC
NYC
ENR 2022 New York Contractor of the Year

Understanding Surety Bonds for General Contractors in New York City

Contractor surety bonds are an important part of the construction process, as they guarantee the owner of the project that the contractor will perform the work and pay their subcontractors and suppliers. General contractors are required to provide surety bonds on public contracts and sometimes on private contracts.
Finding the right company you can trust for all of your surety bonding needs can prove difficult in such a big city. Metayer Bonding Associates offers you the experience you need to ensure your surety bonding program is administered as a seamless and professional process for general contractors in New York.

Serving New York City and the surrounding area since 1996, Metayer Bonding Associates’ strategic partners include 18 of the top, most reputable and competitive surety companies in the United States today.

Whether you are looking for performance and payment bonds for projects that are small in scope or as large as $1 billion, Metayer Bonding Associates is the team you need.

The Surety Company issuing the bonds is financially responsible to complete the project and to pay subcontractors and suppliers due to a contractor’s default under a contract. Contractor surety bonds are typically used to protect an owner against losses resulting from the failure of a construction firm to complete a project or to pay their subcontractors and suppliers.

Michael F. Metayer, President & CEO

One Wall Street Building Conversion: Project Bond Amount $940MM

What is a Construction Surety Bond?

A construction surety bond is a type of guarantee used in the construction industry that guarantees the fulfillment of contractual obligations between a contractor and the Owner or General Contractor, known as the ‘Obligee’. This type of bond provides the Obligee with peace of mind that the contractor will meet all of the requirements of the contract within the designated time frame specified in the contract. Should the contractor default on the agreement, the Obligee may file a claim with the Surety Company who issued the bond to correct any defaults and/or to complete the project.

 

What Projects Require a Surety Bond?

Most construction projects will require some form of surety bond in order to protect the interests of all parties involved. Common examples of projects that may require a construction surety bond include:

  • Government contracts: Most all New York government contracts require contractors to provide a construction surety bond in order to ensure that the project is completed as specified.
  • Private construction projects: While not as common as government contracts, some private construction projects in New York may also require the use of surety bonds. This is typically done in cases where the project is large and complex, and the owner of the project wants to ensure that the contractor has the ability to complete the project. Also the bank providing the financing to the owner of the project may require that the contractor provide a bond. This will ensure that the construction project gets completed which will enable the owner to generate revenues which will, in turn, pay the loan back.

 

How Do Contractor Surety Bonds Work?

A contractor surety bond is a contract between three parties:

  1. the Surety Company
  2. the Principal: Contractors
  3. the Obligee: Public and Private Owners

The Surety Company

Most surety companies are generally a division within a large insurance company. Prior to approving a contractor  for a bond, the contractor must submit to an extensive underwriting process which includes a thorough examination of their financial records and performance history. The surety company issuing the bond provides a guarantee to the owner of the project that the contractor will perform the work under the contract and pay their subcontractors and suppliers.

The  Principal

The Principal is the contractor hired to perform the contract for the Obligee. The Obligee reviews bids submitted by each contractor then awards the contract to the lowest responsible bidder. The Principal is then required by the Obligee to sign a contract and provide the required bond.

By the Principal providing a bond, the Obligee gains several important assurances including:

  • The contractor they have hired has been thoroughly underwritten by the surety company to be fully capable of completing the project per the contact plans and specifications.
  • A lien free project due to the bond guaranteeing that subcontractors and suppliers will be paid.

The  Obligee

The Obligee is the owner of the project being performed.  The Obligee can be a Public or Private Owner or even a General Contractor requiring their subcontractors to be bonded back to them. Most often, the Obligee is a City, State, or Federal Government.

Obligees require a bond from a contractor working on their project as a guarantee that they will fulfill all contractual obligations. This helps to mitigate any risk to the Owner of financial loss as a result of contract failures.

 

What are the Most Common Types of Surety Bonds relating to a construction project?

There are three main types of surety bonds involving construction projects. They are as follows:

  • Bid Bonds – Public Statutes which authorize the letting of public contracts usually require that a bidder shall evidence their good faith by filing with their bid a bid bond from an acceptable surety company. The bid bond represents that they will enter into the contract if it is awarded to them, and provide the required performance & payment bonds. If a bidder is awarded a contract but elects not to enter into contract, the bid bond obligates the surety to pay the difference between the contractor’s bid and the bid of the nearest acceptable bidder to a maximum of the bid bond penalty, whichever is lower.
    A bid bond is usually required in a penalty amount which is small in relation to the contractor’s bid, generally from 5 percent to 30 percent. Bid bonds help to prevent contractors from submitting frivolous bids thereby wasting the owners time and money spent on putting the contract out for bid.
  • Performance Bonds – Performance bonds are generally issued as part of a ‘Performance and Payment Bond’, where a payment bond guarantees that the contractor will pay their subcontractors and suppliers under the contract.

A Performance Bond, sometimes called a contract bond, is a surety bond issued by a surety company to guarantee satisfactory completion of a project by a contractor.
A job requiring a Performance and Payment Bond will usually require a bid bond as noted above. When the job is awarded to the lowest responsible bidder, a Performance and Payment Bond will then be required as a security through contract completion. If the contractor fails to complete the project according to contract specifications, the owner is guaranteed that the project will be completed.

  • Payment Bonds
    Payment bonds are sometimes alternatively referred to as labor and material payment bonds. These bonds provide a guarantee that the contractor will pay their subcontractors and suppliers. This particular bond is of great importance because it offers a viable and efficient solution for non-payment by the contractor.

What does a Surety Company review in order to approve  Contractor Surety Bonds for a client?

In order for a contractor to be bonded, they must go through an extensive bond company review in order to qualify. There are three key areas bond companies focus on when determining the credit-worthiness of a contractor. These are:

  • History of performance. For instance, what have been their largest projects completed in the past and have there been any bond claims and/or defaults.
  • Financial Condition. This entails a full financial analysis in determining the financial strength of a contractor. For instance, the analysis will include a determination of working capital, net worth, and profitability of the contractor.
  • Reputation and Character. For instance, is the contractor honest and trustworthy. Do they work well with others on the project team such as Owners, Subcontractors, Architects, and Engineers.

How to Obtain a Contractor Surety Bond 

Contractor Surety Bonds can be obtained from Surety Agencies like Metayer Bonding Associates.

Contractor surety bonds can be a complex and confusing topic, but it is important to have a clear understanding of how they work before entering into any agreements. These bonds are an important part of many construction projects, and they can help to protect key parties involved from financial losses. When you call Metayer Bonding Associates, you will see why so many contractors rely on us to manage their Bond Program.

Our Bond Companies

Listed below are examples of the bond companies we work with.

Give us a call

We look forward to working with… and for you.

Why Choose Metayer Bonding Associates?

Metayer Bonding Associates is the largest surety only agency serving the Northeastern United States. In business since 1996, our team has the experience to help you structure a solid bond program to handle all of your project needs.

Our strategic partners include 18 of the largest bond companies in the United States. The reputation and credibility that we have developed with these bond companies over the years allows us to provide the most competitive surety programs available in the marketplace today.

We are well poised to work with businesses of all sizes, having bonded projects as small as $5,000 and up to $1 billion in the past. We value all of our clients and strive to provide the same service to each and every one.

For competitive and comprehensive surety services for all of your bond needs, Metayer Bonding Associates has got you covered. Contact us now at 860-676-9402 or at mmetayer@mbasurety.com to find out how we can help. We look forward to serving you!

SEE WHAT OTHER CONTRACTORS & CONSTRUCTION COMPANIES SAY ABOUT US

“Metayer Bonding Associates has done an excellent job handling our bonding needs for the past twenty years. We were a small but growing contractor in NYC when Mike and his company first became involved. They have provided us with numerous bonds since… across the country, and just recently supported a $940mm High-Profile, Complete Building Conversion down in the heart of Wall Street. There are many difficult aspects about doing construction in NYC. Metayer Bonding Associates well understands this and is very adept at making certain that all of our bonding needs are handled in a prompt, professional fashion. We would highly recommend Metayer Bonding Associates to any contractor looking to improve upon their present bonding arrangement.”

STEVE MOUNT, CHIEF FINANCIAL OFFICER
J.T. MAGEN & COMPANY INC.
NYC
ENR TOP 400 CONTRACTORS- #60

“Our company designs and builds food processing facilities. Mike and the entire staff at Metayer Bonding Associates understands our specialized business. Mike, Anne, and Lisa show the same enthusiasm whether we are working on a $9,800,000 bond for our Rodeo Drive project in Beverly Hills, CA or our most recent $92,000 contract for the Sabritas Plant in Celaya, Mexico. They know all the right questions to ask to satisfy the bond company and with Mike’s recommendation bonds are issued seamlessly. After almost 15 years, we have a great deal of trust in Metayer Bonding Associates and with them as a partner we know we are in the best hands.”

JOHN LAPINSKI, CONTROLLER
THE DENNIS GROUP
SPRINGFIELD, MA
UNITED STATES, CANADA, BRAZIL, PORTUGAL
ENR TOP 400 CONTRACTORS – #217

“We have known Mike Metayer for over 20 years dating back to his days in the Surety Home Office of Travelers/Continental. We are very comfortable with the service and expertise that Metayer Bonding Associates provides as it pertains to our bond program. They make the overall surety relationship between the contactor and bond company flow as smoothly as possible.”

BRIAN NICKERSON, CHAIRMAN OF THE BOARD
C.H. NICKERSON & CO., INC.
TORRINGTON, CT

“Mike at Metayer Bonding Associates has covered our bonding needs since our company’s inception. Mike and his team have a can do attitude. We know we represent a very small portion of Mike’s business, but we feel like his most important customer. They understand the construction industry and our specific needs for bonding. We recommend Metayer Bonding Associates to anyone wanting to significantly improve their current Bond Program”

Donal McIntyre, President
Wesbuilt Construction Managers LLC
NYC
ENR 2022 New York Contractor of the Year

“Mike Metayer & Metayer Bonding Associates have handled all of our bonding and surety business since our inception over 20 years ago. Over these years we have utilized their services for bonding of municipal and government-funded projects, completion guarantees for large infrastructure components for our development projects as well as municipal and state bonding requirement for construction performed by our excavation subsidiary. In all instances, Mike and his staff were responsive to our requests and executed on all commitments required for our company. I would strongly recommend Metayer Bonding Associates to any contractor requiring bonding services.”

RANDALL M. SALVATORE, FOUNDER & PRESIDENT
RMS COMPANIES
STAMFORD, CT

“Our company has worked with Metayer Bonding Associates exclusively since the day Mike Metayer started his business. He understands both the complex nature of the construction industry and our specific needs for bonding. Mike has always been able to work with us and his bonding underwriter so that we have never been refused a bond for any project that we felt capable of handling.”

JEFFREY CLEMENT, PRESIDENT
MODERN MECHANICAL SYSTEMS, INC.
FARMINGTON, CT

“As a private Site Contractor in NJ, we have always relied on Metayer Bonding for their excellent, transparent, knowledgeable service. Mike and his staff are extremely professional and treat our Company so respectfully, despite being a very small client. It is without hesitation we recommend Mike and his team and look forward to working with Metayer Bonding for a very long time.”

HEBERTON “RUSTY” FRICKE III, DIRECTOR OF OPERATIONS
R & R CONSTRUCTION CO., INC.
CHESTER, NJ