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Repairs and remodels can be stressful, so you'll want to know that they're done right.

As an owner, a
Warranty Bond helps you cut the risk of defective construction by insuring the work performed. You
can also benefit from a Warranty Bond since your money will be reimbursed if your contractor goes
out of business or can't repair the construction work. A Warranty Bond is a contract between an
owner, a contractor, and a surety company. It guarantees that any work defects found in the original
construction will be repaired during the warranty period. If the contractor can't fix the defects, the
owner will be repaid. Your state or a surety company usually issues Warranty Bonds.
Warranty bond is a guarantee issued by a bank on behalf of the seller which secures any claims by the
buyer on the seller due to possible defects in the goods during any agreed warranty period. In building
construction business, warranty bond is guarantee for investor, that contractor will solve all warranty
issues in warranty time.
Warranty Bond- A warranty bond (also known as a maintenance bond) guarantees for the owner of the
project, that the contractor will solve all warranty issues during the specified warranty period, which is
usually 1 year from completion/acceptance of the project. The warranty period could be longer
depending on the terms of the contract. If contractor is unable to solve the warranty issue or is not in
business during the specified warranty period, the warranty bond provides the owner of the project with
a remedy through the surety to fix the warranty issues.

When requesting a warranty bond on an account that has already been previously submitted to
the surety, among the most important information that needs to be provided to the surety are the
following information:
o
The Bond Request form - this will provide the surety with a basic overview of the
o

current bond being requested.


A copy of the complete contract. The contract will verify among other things: that a

bond is required; the penal sum of the warranty bond; the duration of the warranty period;
the scope of work covered with the warranty, etc.
Provide information on how the contract was awarded. Was the contract awarded as

part of a negotiation or was it awarded though a bid process? If the contract was received as
part of a bid process, the surety will inquire as to what security was used to bid the project
and want to know the bid results. The bid results is a tabulation of all bids that were entered
for that contract. If the low bid and the second low bid is different by more than a certain
percentage (most sureties usually has range from 10-20%) they will require an explanation for
the difference.
If the obligee/owner has their own warranty bond form, surety company will want to

verify that the form has acceptable language. If no required form exist, most sureties have
their own generic form.
Provide a list of companies/manufacturers or vendors that can provide the same or
comparable work as specified in the warranty as to provide assurance to the surety that if
contractor defaults, surety can easily find another entity to cover the warranty.
If the surety bond is the first bond being requested on behalf of a new contractor, the following

information should be provided in the submission in addition to the above mentioned items.
o
Contractor's Questionnaire.
o
Business financial statements (balance sheet, income statement, statement of cash

o
o
o

flows and aging schedule for accounts receivable and accounts payable) for the company's last
3 fiscal year end.
Interim Business Financial Statements.
Personal Financial Statement for all owners of the company
Articles of incorporation (if corporation), LLC agreement (if business is a LLC) or
partnership agreement (if business is a partnership).

Bank reference letter and last 3 months most recent business and personal bank

statements.
Resume for all key personnel of the business.
Copies of all insurance (general liability, professional liability, worker's compensation,

o
o

etc).
Current work in progress schedule.
Copy of the contractor's license and other relevant licenses.
Copy of the trust f any of the owners of the business have their assets held in that

o
o
o
trust.

http://www.knowsuretybonds.com/contract_warranty_bond.html
1.
1.

Use the Warranty Bond document if:


You are a contractor and the project documents or owner requires that you
provide a guarantee regarding the repair of any defects in your work.
2.
You are a project Owner who would like a guarantee in the event the Contractor
fails to repair any defects in the project.
2.

Warranty Bond - Rocket Lawyer


https://www.rocketlawyer.com/document/warranty-bond.rl

Warranty Bond

Guarantees the completed works during the maintenance period, generally one year, against defective workmanship or
materials.
What is a Warranty\Maintenance Bond?
When requested this bond is usually written for 1 year. Unlike product warranties, this bond simply
guarantees the workmanship of the contractor for a given period of time.

What Is A Warranty Surety Bond?


Many surety bonds can be quite confusing at times and Warranty Bonds are no stranger to this fact.
In short a Warranty Bond is a type of contract surety bond that is required by contractors who are
engaged in the execution of a contract. A Warranty Bond acts as a reassurance that the contractor
will fix or repair any warranty issues within the time restraints or deadlines stipulated in the
negotiated and agreed upon contractual deadlines. This will also act as a safeguard against the
problems that will arise in the unfortunate circumstance that said contractual obligations cannot or
will not be met by the contractor.

Why Do I Need A Warranty Surety Bond?


Are you a contractor currently seeking bonding in order to obtain a contract or contracts? Do you
wish or aspire to execute multiple projects in multiple states? If yes was the answer to these
questions then you are most certainly in need of a Warranty Bond. State and local laws require that a

Warranty Bond be filed by the contractor to provide assurances to the project owner that all warranty
related obligations will be met in a timely fashion within the contractual guidelines and obligations
without fail at all times. This will also serve as proof of your compliance and adherence to the state
and local laws and regulations that govern your industry. So if you are a contractor and you are in
need of a Warranty Bond you have certainly come to the right place!

Adding on to a new or existing home is often a risk. Plumbing, electricity and


even general contracting are expensive undertakings and there is a chance
that things may go very wrong if they are done improperly. Understanding
what a warranty bond is and how it can protect you and your major
investment is an important factor in deciding upon a contractor to work on
your property.

1.
o

Function
A warranty bond ensures that the work done by a contractor is
not only to your satisfaction, but adheres to all state and local codes for the
work done. Warranty bonds are usually administered by the state in which a
contractor operates. Most reputable contractors will advertise their "licensed
and bonded" status.

Benefits
o

The benefit of a warranty bond is to repay money invested if the


work can not be done within the specified time, or if the company or
contractor goes bankrupt. For example, if a bonded plumber's business goes
bankrupt while installing plumbing on several houses, the warranty bond
repays the money that was invested in a project if it is not completed yet.
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Considerations
o

Most warranty bonded services are somewhat more pricey than


non-bonded work, particularly because the workmanship is guaranteed.
Some contractors may opt to go with unb-onded sub-contractors, especially
in large construction projects, but run the risk of the sub-contractor under
performing or disappearing with the money paid up-front.

Time Frame
o

Typically, the lifespan of a warranty bond is one year from the


completion of the work. For homeowners and contractors who hire a bonded
workman, this means that they can rely on the contractor to fix any problems
that arise without having to pay for additional supplies or labor. Beyond a
year, however, it is up to the workman to decide how to handle any needed
repairs.

Misconceptions
o

A warranty bond is no guarantee of flawless performance or


trouble-free operation, but merely an insurance policy against it. Typically, as
long as the bonded workman continues to repair any problems for the
specified period of time, the homeowner or contractor who hired him or her
has no legal recourse unless they can prove gross negligence or fraud in the
execution of the work.

Read more : http://www.ehow.com/about_4707198_what-warranty-bond.html

When a client chooses to have contract work on their home or property, they are putting a great deal
of trust into that contractor who will be doing that work. Because there is risk to this, the contractor
should secure a warranty bond. Warranty bonds ensure that clients are able to have peace of mind
in the work that will be done to their property.
A warranty bond serves an important purpose. This type of security bond will indicate to your clients
that you have taken extra steps to prove your trustworthiness. As a contractor, your security bonds
are stating that you have a history of trustworthiness and this is why the state granted you the bond.

Additionally, you are letting the client know that they are not defenseless should the work done on
their property be subpar, dangerous, or unethical in any manner whatsoever.
Warranty bonds are important to the client and the contractor. If you need to apply for one of the
bonds, then the professionals at Ox Bonding can help you.

CARI
I.

II.

Contractors All Risk


1.

Duly accomplished Sworn Statement of Claim (to be supplied by adjuster)

2.

Duly accomplished Non-Waiver Agreement (to be supplied by adjuster)

3.

Incident Report

4.

Weather and rainfall report from the nearest weather station officially issued by the PAGASA (if
applicable/required)

5.

Copy of Contract Agreement with Bid Estimates

6.

Copy of Notice of Award

7.

Copy of Notice of Commence

8.

Copies of Business Registration, permit, etc.

9.

Survey of damages based on standard engineering practices (Plans, survey data, PERT CPM, etc.)

10.

Projected Cash Flow of the project

11.

Detailed computation of loss and damages in order to bring back the damaged portions to its original
condition before the loss

12.

Certified copies of recent and previous monthly accomplishment/progress report including its back up
computation

13.

Certified copies of recent and previous billing reports

14.

Documents in support to the actual cost of repair/replacement of the affected properties such as invoices,
receipts, etc.

15.

Clear and properly annotated panoramic pictures immediately taken after the loss

The contractor all risks policy is specially designed to cover for loss or damage to
predominantly civil engineering construction projects ranging from small villa to
construction of bridges or high rise.
This is an All Risk policy covering various activities of construction (except

specific exclusions as mentioned in the policy)


This policy can be taken out in the joint names of the contractor and the
employer. This policy enables the Contractor or Employer to comply with the
insurance requirements of the Contract
III.

Cover can be extended to include constructional plant as part of the Contractor


All Risks cover

http://www.axa-gulf.com/uae/en/Contractors-AllRisksConstruction All Risk


Businesses that operate in complex industrial sectors require sophisticated risk
management solutions for their onshore construction projects.
Our Construction All Risk insurance can be customized to combine commercial property
and catastrophic cover with other specialty coverages to address the wide-ranging
exposures of construction projects. Drawing on long-term experience and expertise, we
marry highly-rated capacity with flexible coverage and expert loss engineering services to
protect a project from inception through completion and beyond.

Features & Benefits

Available limits among the highest in the industry

Flexibility of admitted and non-admitted policy forms available in all 50 U.S. states

Global risk transfer solutions can be tailored for accounts of all sizes

Underwriting, engineering, loss control and claims services provided by energy


industry specialists located worldwide

More than 30 years of experience as a market leader

Coverage

Available limits of up to $250 million

Natural catastrophe capacity, including earthquake, flood and windstorm

Contractors property, including real and personal property, contractors equipment


and boiler and machinery

Builders risk designed for installation coverage for trade and smaller contractors

Testing and commissioning

Blended construction and operational programs

Delay in start-up (DSU) coverage, including soft costs, debt service and advance
loss of profits/rents

Transit, ocean cargo and inland marine coverage also available from AIG

Wherever there is the construction of buildings or civil works, there is a risk of loss or
damage. The contract governing the works will place the responsibility for this loss or
damage with either the Contractor or Employer.
Our Contractors All Risks insurance policy can protect either party against the cost of this
loss or damage.

All Risks Key Features

Cover for damage to permanent and temporary works and free issue materials,
whilst on site and whilst in transit to and from site.
Cover for owned and hired in plant and machinery.
Up to 12 months cover after completion for contractual obligations forming part of
the maintenance or defects liability period.
Cover for any party that is required to be a joint named insured under the contract
Additional cover as standard including Professional fees and Debris Removal. Please
refer to the policy wording for a full list of extensions.

Contractors' All Risks Insurance (CAR) - this provides coverage for buildings and civil engineering projects during
construction, against accidents resulting in loss, or damage/destruction of materials, work in progress, construction
plant and equipment and construction machinery. Construction of condominiums, offices, buildings, hospitals,
schools, factories, roads and bridges are just a few examples of where CAR can be applied. The policy protects you
against accidents and damage caused by fire, lightning, explosions, earthquakes, landslides, typhoons, floods, short
circuit (and other electrical causes), negligence, lack of skill, malicious acts, theft, and burglary.

http://www.bpims.com/engineering_insurance.htm