Tammy,
Hopefully I can shed some light on this for you.
It is not the community that needs to be bonded, it is the
contractor you hire to do the work. The bond would be in place to guarantee that the
contractor completes the work. It would protect the community should the
contractor default. This is important, as you want to ensure the work is completed. What if you were to pay the
contractor only to have them go bankrupt? If the
contractor is bonded, then the
bonding company would pay for another
contractor to complete the unfinished work. Thus, guaranteeing that the work is completed.
The type of bond that guarantees a contract like this is called a "
performance bond". If you are putting out the contract to
bid, you will also want to require a "
bid bond" of any
contractor participating in the
bid. To keep it simple, the
bid bond guarantees the
contractor qualifies for the
performance bond (not all
contractors qualify) and the
performance bond guarantees the scope of the contract.
Here is an online video tutorial that might be of use:
What Is A Surety Bond? | What Are
Surety Bonds? | JW
Surety Bonds
Our agency offers
bid and
performance bonds. If you have a
contractor in need of
bonding, have them start at:
Contract Bond Applications - JW Surety Bonds
Let me know if you have any questions!