3 Facts About Maintenance Bonds You Should Know Before Your Contractor Begins Work
If you are about to begin construction on your commercial property in New Jersey, you probably have discussed a New Jersey surety bond for maintenance with your contractor. You know that maintenance bonds can provide you with compensation for some defaults in construction that come to your attention after the project is completed. However, there is some information that is commonly misunderstood regarding these types of bonds. Here are three facts you should know about maintenance bonds.
- A Maintenance Bond Is Not Insurance
Bonds are not insurance policies you purchase. The bond is issued as a contract with you, the surety, and the contractor. A loss is not expected here the way claims are expected with insurance policies, and the surety will expect the contractor to pay back any loss.
- A Maintenance Bond Usually Covers a Specified Amount of Time
If you discover any defects in construction caused by your contractor’s work, you will need to seek compensation within the amount of time designated in the contract. The maintenance bond is not usually for a lifetime so make sure you know the timeline.
- A Maintenance Bond is Only One Type of New Jersey Surety Bond
The maintenance bond is important, but other surety bonds exist for New Jersey commercial projects. Inquire about bid, performance, and payment bonds as well as labor and materials bonds.
Learn what you can about surety bonds before your contractor begins. Making sure you recognize these three facts about your maintenance bond can keep you from common misunderstandings after construction is complete.