Bonding for Playground

[deja53]

Our community is putting in a playground on our old baseball field. We are establishing a corporation in order to apply for grants. We've been told that we would need to be bonded for liability purposes. What type of bonding would this require? What is the average yearly price for bonded corporations?

Thanks,
Tammy

[Admin]

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!

[deja53]

Thanks alot. I was a bit confused as to why we would actually need to be bonded.

Tammy

[Admin]

Once again, you do not need to be bonded. You will require the contractor to be bonded. Therefore, the contractor needs to be bonded.