Performance Payment Bond | Wharton Surety, LLC

These are some of the Questions most frequently asked

What is a surety bond?

A surety bond is a three party credit instrument where the three parties are the principal, the obligee and the surety. The surety’s role is to guarantee the performance of the principal, and the obligee is the beneficiary of that guarantee.

Why do I need a bond?

In many instances, local, state and federal agencies are legally required to ask contractors who are performing work that is funded by public money to provide a bond. Sometimes, private owners also require bonds from their contractors.

What is the purpose of a bid bond?

The bid bond guarantees that the principal will enter into the contract once it is awarded. If the principal who provided the bid bond fails to sign and enter into the contract, the bid penalty will be forfeited to the obligee.

What is the purpose of a performance bond?

A performance bond guarantees that the principal will perform all aspects of the underlying contract according to the terms outlined in that contract.

Can I get a performance bond for hauling municipal waste?

A performance bond can be obtained for virually any contractual agreement. Your agent will find a surety company who understands your business and will help you qualify for the bonding you need. Many bond forms related to the municipal waste industry can be found on this page.

What is the purpose of a payment bond?

The payment bond guarantees that suppliers of material and services related to the bonded contract are paid the amounts due.

As the principal, how does the surety bond benefit me?

The bond is designed to protect the obligee, and in some cases several obligees who are party to the underlying bonded contract. The principal is the party that benefits from having the backing of a third party.

What do I need in order to qualify for bonding?

Surety companies base their decision about whether to provide bonding on three basic criteria, 1) Credit history, 2) Work history, and 3) Financial resources. Being able to get a bond for certain types of contracts is to a great degree dependent upon demonstrating that all three of these criteria are appropriate for the work that is being performed.

Is it hard to qualify for bonding?

Like many other questions in life, the answer is not always clear. The factors that enter into getting a performance bond depend on an evaluation of the items mentioned above, as well as the size of the contract, the complexity of the work, confirmation of the financing for the project, location of the work, and the terms of the contract and a very long list of variables that can effect the principal's ability to perform the contractual obligations. Your agent will help you through this process making it as simple as possible.

I need a bond right now, how do I get started?

The place to start is with a reputable surety agent who represents a variety of surety companies that are capable of providing bonding for you. The agent will guide you in assembling the information that will be needed to get your account established. To start the process please go here.

Wharton Surety: Knowledge is Power

Because we find our efforts to optimize the surety credit available to our clients is greatly improved through an open exchange of ideas...we thought it would be helpful to compile a listing of some of the questions that are most frequently asked by people who are new to surety.

If you have a question that isn't covered here, feel free to ask it here.

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