My question is mostly geared to Payment Bonds and who actually pays for them and holds the tile to said bond. And if they are also the same thing as a surety bond, just as an interchangeable name.
I understand that the GC would get the Bid Bond, as a form of bid security in lieu of a certified check. I know that the GC would also get a performance bond, if requested by the owner or is a public project, that guarantees that the GC would be able to carry out the work if something happened such as bankruptcy or some other GC related disaster.
Payment Bonds are used to pay the sub-contractors if they are not receiving payments on complete or portions of the work already carried out. But is it on the Owner that secures this bond? and if so do then they get billed by the bond provider (surety)? and how is this different from a surety bond, if at all?
Please sign in to leave a comment.