Maintenance Bond
Contract Surety Bond Facility
If you are tendering or performing work on a project that requires a Maintenance Bond, you’ve come to the right place! We provide full contract bonding services to clients of all types and sizes. Whether you’re a well-established landscaper with a municipal contract, or a commercial painting business with your first large scale job, we’re here to help you get the bonds you need. Learn more below and apply today!
What is a Maintenance Bond?
A Maintenance Bond is a contract surety instrument that guarantees the maintenance of a contract for faulty workmanship and/or defective materials. It can only be placed after the final acceptance is completed for the performance contract between a Principal Contractor and Owner / Obligee. Maintenance Bonds are most common on $200,000+ contracts such as commercial painting or municipal park care duties. The bond can be arranged for any timeframe; however, 2 years is most frequently requested duration.
Why do I need a Maintenance Bond?
Maintenance Bonds are somewhat rarely used in the 2020’s. They are requested at the discretion of a project owner / Obligee who would like excess protection from defects and faulty work that has been completed for a specified time period. Most Performance Bond wordings include a 1 year maintenance period by default which is another reason that Maintenance Bonds stand-alone are used less frequently. You can learn more about common Canadian construction bond wordings via the CCDC surety bond page.
Maintenance Bonds guarantee contractual obligations for a project and are also sometimes called warranty bonds. They are supplementary to performance and payment bonds, not replacements for them.
When is a Maintenance Bond Issued?
Maintenance Bonds are only issued upon a completed construction project or works being finished. They are not issued at the bidding phase, or at the same time as performance bonds or other warranty bond documents.
As mentioned previously, a performance bond or other construction bond may also be requested for a construction project by the owner.
Is a Maintenance Bond the same as a Warranty Bond?
Yes. Maintenance Bond and Warranty Bond terminologies are interchangeable and are typically referencing the same guarantee requirement. If a construction project or any other work that is in need of a warranty term, it is likely they are looking for maintenance bond guarantees. It’s important to note that details like a contractor’s credit score, or principal’s credit score may affect a businesses capability of fulfilling any maintenance bond requirements.
How much does a Maintenance Bond cost?
The cost of a Maintenance Bond will vary pending the information put forth in your Bond Facility application. Standard industry rates for Maintenance Bonds are usually between $2 – $15 / $1,000 depending on the risk, contractor, and other factors including financial position and credit score of the business applying.
The capability of providing any contract bonds is part of an annual subscription called a Bond Facility which typically costs about $3,000 per year (this cost may vary depending on corporate complexity).
What other types of bonds are available?
Besides Maintenance Bonds, typical Surety Bond requirements can almost all be provided through your Bond Facility, these include but are not limited to:
E-Bonding
We always have the capability of providing verified “E-Bonding” that is in compliance with the Surety Association of Canada’s required criteria outlined here.
Provide any Maintenance Bonds required
Issue Final Bonds like a Performance Bond
Issue Tender Bonds such as Bid Bonds
Reliable Canadian Underwriters
E-Bonds when possible
How It Works
Step 1
Complete a brief online application about your business for our surety bond providers.
Step 2
Our expert staff will guide you through the process of obtaining the bonds you need.
Step 3
Have the Maintenance Bond you need issued so you can get back to running your business.
When Are Maintenance Bonds Used?
In this article, we’ll review the broad scope of contract surety bonds in Canada, while focusing on when Maintenance Bonds are used in different scenarios.
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