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The Public Works Bond is required for the performance of public construction works. Similar to the payment bonds or performance bonds that are commonly required for federal projects under the Miller Act, the public works bond is their equivalent on the state level. Nearly all states require some form of this bond.

Depending on state statutes, such bonds may be required to secure both the performance of the contract and the payment to subcontractors or, in some cases, only the latter. The purpose of this bond is to provide security on public works projects, to guarantee that contractors will comply with state law, and to provide compensation to the public and the state in cases of breach of contract or default.

Public Works Bond rates start at 1% or higher based on credit and financial strength

Minimum premium of $250

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Public Works Bond FAQs

Are you hoping to learn more about the public works bond? In that case, you have come to the right place. This FAQ section will answer some of the questions we often hear about public works bonds.

What is a public works bond, and how does it work?

A public work bond is a type of surety bond needed for public building projects. It is also known as a performance or construction bond. It guarantees that the contractor, who is referred to as the “principal,” will follow the terms of the agreement and complete the job as specified.

If the builder fails to fulfill the contractual requirements, the bond safeguards the public project owner, who is referred to as the “obligee,” from monetary damages.

The builder usually works with a surety company to secure a public works bond that will evaluate the service provider’s financial soundness and ability to finish the job.

In the event that the builder fails to complete the project, the insurance company either arranges for the completion or pays the project owner an agreed sum of money. This provides project owners with the assurance that the building process will be completed as promised.

Who requires this kind of surety bond?

To ensure the successful completion of projects, public organizations, such as government entities, municipalities, or state bodies, often ask contractors to secure public works bonds prior to the commencement of work.

What is the difference between public works, performance, and payment bonds?

Both public works and payment bonds are important in the construction industry, but they serve different functions.

A public works bond, which is also referred to as a performance or construction bond, ensures that a builder will execute a construction project in accordance with the contract conditions, safeguarding the project owner (often a public organization) against the contractor’s failure to do so.

On the other hand, a payment bond concentrates on suppliers and subcontractors, ensuring that they get paid for their work and products. The payment bond protects the relevant company against non-payment in the event of contractor default or financial difficulties.

While both types of bonds offer financial security, public works bonds are advantageous for the project owner by ensuring project completion, whereas payment bonds assist subcontractors and suppliers by securing payment for the services provided.

How do I obtain public works bonds for construction projects I am working on?

If you would like to obtain a public works bond, you will need to get in touch with us or fill out the quote form below, and we will guide you on how to get started.

Why should I choose S Philips Surety & Insurance Services, Inc. instead of other surety companies?

S Philips Surety & Insurance Services, Inc. has been in the industry for four decades. Our experience and attention to detail ensure that every contractor or project owner who works with us has a stress-free experience.

If your project requires the use of a performance bond, then you can rest assured that we can assist. 

In addition to bonds for public works projects, we also offer other types of bonds, such as a contractor license bond and bid bond, in addition to payment and performance bonds.

What happens if the contractor fails to hold up their end of the bargain?

In the event that the contractor is unable to meet the requirements set out in the contract, the surety company will provide the public entity with compensation to cover its financial losses.

How much does a public works bond cost?

The cost of the bond will typically be a percentage of the bond amount. To learn more about the cost, you can request a free quote by completing the online form at the bottom of this page. 

Do you require more information? We are happy to answer any questions you may have. Alternatively, fill out the quote form below to get your FREE bond quote.

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