PROVIDING SURETY BONDS IN NEW YORK CITY AND THE TRI-STATE AREA

There are many difficult aspects about doing business in the New York City Metropolitan area. Navigating the surety waters can be very difficult. Through our numerous years of experience in New York City and the Tri-State area, we make the handling of your surety needs flow smoothly. Our Bond Company relationships are strong and time tested which provides us with complete market coverage to secure the most effective surety support in the industry today.

Performance and Payment 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 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 described below. When the job is awarded to the lowest responsible bidder, a Performance and Payment Bond will then be required as 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 and that subcontractors and suppliers will be paid. Payment Bonds are sometimes alternatively referred to as Labor and Material Payment Bonds. This particular bond is of great importance because it offers a viable and efficient solution for non-payment by the contractor to their subcontractors and suppliers.

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 required in a penalty amount which is small in relation to the contractor’s bid, generally from 5 to 30 percent. Bid Bonds help to prevent contractors from submitting frivolous bids thereby wasting the owners time and money spent on the putting the contract out for bid.

What factors are used in determining the cost of Performance and Payment Bonds?

Surety Companies use a variety of factors to determine the premium rates they charge. For example, larger, more financially stable contactors will typically garner a lower rate. A contractor who frequently requires bonds and is in good financial condition will also qualify for preferred rates. Working with Metayer Bonding Associates will ensure that you are provided the most competitive rates available in the marketplace today.