Contract Bonds

How Guignard’s Surety Support Is Different

At Guignard, we do far more than place bonds, we serve as a strategic partner in your business. Our surety support is proactive, comprehensive, and highly personalized, designed to function as an extension of your internal team. We anticipate challenges before they arise, navigate the surety marketplace on your behalf, and advocate for your best interests at every stage of the process.

True surety support demands deep experience, strong carrier relationships, and an ongoing commitment to our clients. While many focus on transactions, Guignard focuses on outcomes. Our approach strengthens your operations, protects your business, and positions you for sustainable, long-term success.

Types of Contract Bonds

Contract Bonds

Bid Bonds

Bid Bonds are the gateway to any contracted project. A contractor seeking to win a project will submit a bid, outlining their cost and timeline to complete the work. Project owners, particularly in the public sector, demand a guarantee that the bids they receive are serious and financially viable.

If the contractor is awarded the project, the bond guarantees that they will execute the contract and furnish the required Performance and Payment Bonds.

Bid Bonds are typically issued for 5–10% of the bid amount. If a winning bidder fails to honor their bid, the owner may recover the difference between the defaulting bid and the next lowest bid, up to the bond’s full value. This protection preserves the integrity of the bidding process and avoids costly project delays.

Contract Bonds

Performance Bonds

This is arguably the most crucial type of surety bond for the project owner. A Performance Bond guarantees that a contractor will complete a project in accordance with the contract’s plans, specifications, and terms. If a contractor defaults due to financial distress or other unforeseen challenges, the surety ensures the project is completed.

It provides peace of mind that even if the contractor faces unforeseen challenges, financial hardship, or defaults on their obligations, the project will not be left incomplete. This bond is a powerful tool for risk mitigation, shielding the project owner from potentially catastrophic financial losses and delays.

Performance Bonds are typically written for 100% of the contract value, providing project owners with critical protection against financial loss and schedule disruption.

Contract Bonds

Payment Bonds

Payment Bonds work in conjunction with Performance Bonds to ensure that subcontractors, laborers, and material suppliers are paid for their work. While the Performance Bond protects the owner from non-performance, the Payment Bond protects against non-payment claims.

If a subcontractor or supplier is not paid, they have the legal right to place a lien on the project owner’s property, which can cause significant legal and financial complications. By requiring a Payment Bond, the project owner ensures that these parties have an alternative avenue for recourse. They can make a claim directly against the Payment Bond, which is underwritten by the surety. This process keeps the project lien-free and ensures a stable and fair working environment for everyone involved, from the general contractor down to the individual laborer.

Surety Expertise

Frequently Asked Questions (FAQ)

Surety bonding is not just transactional—it’s a form of risk management. Construction carries inherent risks, including delays, cost volatility, labor shortages, and unforeseen conditions. Your surety partner should help manage those risks, not simply issue bonds.

Guignard provides strategic guidance and tangible support tailored to your organization. Contact us to learn how our approach can strengthen your surety program.

Advocacy is crucial. We act as your liaison, representing your company's strengths and capabilities to the surety market.

We present your financials, work-in-progress, and project history in the strongest possible light, anticipate underwriter concerns, and negotiate favorable terms on your behalf.

Our in-depth understanding of surety underwriting criteria allows us to anticipate questions, address concerns, and highlight your unique value proposition. This is crucial to successfully obtaining a surety bond.

A top-tier surety bond agency will always keep you informed. You need to know where you stand with your bonding capacity and, more importantly, what you can do to maximize it. This involves transparent discussions about your financial health, operational efficiency, and strategic planning. We provide actionable insights and guidance on how to successfully obtain a stronger bond program, whether that means improving your financial ratios, diversifying your project portfolio, or refining your internal controls. Our goal is to empower you with the knowledge and strategies to secure the bonding you need for future growth and success.

What Guignard Does Best — Relationships, Reach & Market Intelligence

In today’s dynamic surety environment, relationships and market awareness matter more than ever. Underwriting and capacity can shift quickly, and success depends on knowing where opportunity exists, often before it becomes visible to others.

Guignard’s long-standing relationships with top-rated sureties provide our clients with the best possible outcomes. This allows us to navigate changing conditions, identify alternatives, and position our clients advantageously as the needs evolve.

Moreover, being aware of the market means understanding current trends, potential challenges, and emerging opportunities. This allows us to adjust accordingly if needed, proactively seeking out alternative solutions or advising you on the best course of action in a changing environment. We don't just react to the market; we anticipate its movements and position your company for success regardless of the prevailing conditions. This strategic foresight is invaluable in ensuring your access to bonding remains consistent and reliable.

We don’t simply react to the market—we anticipate it, ensuring your surety program remains stable and aligned with your long-term growth objectives.

The reality of every bond you provide is that you are backing the bond with company assets, and maybe even personal assets, via an indemnity agreement with the surety. This is a crucial point that often gets overlooked in the initial stages of obtaining a surety bond. An indemnity agreement is a legal contract where you agree to reimburse the surety for any losses it incurred due to claims made against your bonds.

Because of this significant financial exposure, it’s critically important that you have a strong, knowledgeable bond agency advocating for you. A qualified agent will help you understand the full implications of your indemnity agreement, negotiate favorable terms when possible, and work diligently to prevent situations that could lead to claims. We understand the personal and professional stakes involved, and we approach our role as your surety bond expert with the seriousness and dedication it demands.