Although there are many types of insurance bonds, the four most common types needed by business owners are:
Bid Bond – Ensures the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract.
Payment Bond – Ensures suppliers and subcontractors are paid for work performed under the contract.
Performance Bond – Ensures the contract will be completed in accordance with the terms and conditions of the contract.
Ancillary Bond – Ensures requirements integral to the contract, but not directly performance related, are performed.
