Performance bonds are commonly used by a property owner or investor to require the developer or builder to assure that contractors or project managers procure such bonds in order to guarantee that the value of the work will not be lost in the case of an unfortunate event (such as insolvency or bankruptcy of the contractor). Performance bonds can also be used to guarantee payment If you have provided labor, material, or services for a construction project, you are entitled to payment however, if payment is not made to you, then you may have a right to payment under a payment bond as opposed to a construction lien.
A surety’s first obligation upon receiving a performance bond claim is to commence an investigation of the claim. The surety’s investigation is a fact-finding exercise intended to promptly determine whether the bond principal is in default of its contractual obligations and if so, whether the surety has liability under the performance bond. Because the surety’s investigation will determine its response to the claim, it is important that the surety conducts the investigation in an expeditious and comprehensive manner and gather as much information as is reasonably available.
Our firm provides our clients with representation and advice through all phases of surety claim and construction project so that our clients can concentrate on the project they are working on and not the complex legal issues that could result from a performance bond claim.
