Payment Bond

There are several categories of contract bonds (construction bonds, payment bonds, performance bonds, or subdivision bonds) all of which are three-party agreements between the contractor, owner as oblige, and the surety.

A payment bond, a type of contract bond, guarantees that a contractor will pay suppliers, laborers, and subcontractors (subject to contract terms) for labor and materials. Generally, payment and performance bonds are issued together as one bond, termed a "Performance and Payment Bond".

There is no high-risk market available for performance and payment bonds. Up to the turn of the century bonding companies were approving everyone, even those who did not qualify for the bond type or size. During this time record loses occurred throughout the industry as many companies closed their doors. Since this time the industry has stabilized as bonding companies have set up more rigid guidelines for approval.

Lakhani Insurance has the ability to issue both small and large contracts, as well as hard to place bonds. We are always reviewing what carriers are offering in an effort to get you the bonds you need, at a price you want.