Maintenance Bond Coverage in Washington
- Also known as warranty bonds
- Guarantee the quality of the contractor’s work
- Frequently needed for state and federal projects
What Is A Maintenance Bond?
Sometimes called warranty bonds, a maintenance bond is a type of surety bond that protects the owner of a completed construction project for a specified time period against faults and defects in workmanship, materials, and design that could arise later if the work was done incorrectly.
Maintenance Bonds vs Performance Bonds
Maintenance and performance bonds both relate to the work done on construction projects. A performance bond guarantees that the project will be done according to the contract’s terms and schedule. A maintenance bond guarantees the contractor will remedy any problems related to workmanship, materials, or design. Contractors can acquire both maintenance and performance bonds at the same time. Additionally, contractors can acquire payment bonds to guarantee they will appropriately pay subcontractors and suppliers.
Maintenance terms are typically set for a period of 12, 18 or 24 months.
How Much Does A Maintenance Bond Cost?
Maintenance bond cost is a percentage of the bond amount. The surety will determine that percentage based on a number of factors, including the:
- Amount of coverage required
- Principal’s experience in the construction industry
- Principal’s financial records (financial statements, including income statement, cash flow statement, etc.)
- Principal’s credit score
The higher a contractor’s credit score, the lower the bond premium will be. Typically, those with an excellent credit score can expect a premium of 1% to 4% of the total bond amount. For a $30,000 maintenance bond, for example, principals can expect a premium between $300 and $1,200.
What If I Have Bad Credit?
At some point, many great companies and owners have had setbacks. Not to worry. Alliance West Insurance, Inc. works with all major surety bond companies as well as specialty surety bond companies. Credit is an important piece of the underwriting process but not the only piece. We will work with you and the company to find a solution everyone is comfortable with. In rare circumstances, we have other tools that can help contractors with credit challenges including access to the SBA Bond Guarantee Program, Funds Control and Collateral Programs. There is rarely a situation when we can’t provide a solution. Unlike some internet companies, we are surety bond experts first. It is one of the reasons we have been so successful. Contractors often call us after they have been turned down by another surety bond broker.
How To Get Your Maintenance Bond?
To get your bond, contact Alliance West Insurance today!
Alliance West Insurance, Inc.
6919 Lakewood Dr. W., Ste. D-1
Tacoma, WA 98467
Hours By Phone:
Monday thru Friday: 9:00 am – 6:00 pm
Saturday: 10:00 am – 6:00 pm
Hours For Walk Ins:
Monday thru Friday: 9:00 am – 5:30 pm