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Site Bonds

Site Bonds

  1. New Development Bond
    1. Definition: Protects the Obligee (usually the local governing agency) from financial loss should the Principal fail to complete the Contract
    2. An agreement under which the Surety guarantees to the Obligee that the Principal will perform a Contract in accordance with the terms and conditions of the contract agreement
    3. The integrity of the Principal must be investigated before underwriting
    4. Four C’s evaluated: Character, Continuity, Capital, Capacity
    5. Review of references, experience, ability, financial strength, credit history, established relationships, and lines of credit.
  2. Individual Lots Bond
    1. Guarantees performance of the site improvements to the Obligee (usually the local governing agency)
    2. Protects the Obligee from financial loss should the Principal fail to complete the improvements
    3. The integrity of the Principal must be investigated before underwriting
    4. Four C’s evaluated: Character, Continuity, Capital, Capacity
    5. Review of references, experience, ability, financial strength, credit history, established relationships, and lines of credit.