CONTRACT SURETY

Gray Surety specializes in the bond requirements of contractors and subcontractors needing bonds for public and private works typically up to about $4 million dollar projects and tend to look at aggregate work programs in the $8 million dollar category. Our underwriters posses the experience, knowledge and skills necessary to help companies grow and, with Gray Surety having a “T Listing” capacity of over 8 million dollars, it is evident that we have the capacity for our contractors to grow with us over time.

Gray Surety writes Contract Bonds in both The Gray Casualty & Surety Company and The Gray Insurance Company in the following States:

Surety Credit
The application process for “Surety Credit” is similar to applying for a commercial line of credit at a bank. Our programs are written through professional surety producers who are spread across the southern states. If you contact us we will happily refer you to producers in your area.

Bid Bonds
Bid Bonds are a financial guarantee by the Surety to the Obligee, usually the project owner, that the Contractor will honor his bid price, enter in to a contract and supply the required Performance and Payment Bonds. The Bid Bond amount is usually 5 % of the Bid Amount. If the contractor fails to honor his bid or can not furnish the Performance or Payment bonds, the Surety is liable for the difference between the first and second bidder up to the face amount of the bond.

Performance Bonds - Payment Bonds - Maintenance Bonds - Supply Bonds
The Performance Bond guarantees the performance of the Contractor, that they will complete the contract at the price stated as per the plans and specifications. If the contactor defaults the Surety must step in and complete the project or pay to have it completed up to the bond limits. Most Performance Bonds are written at 100% of the contract amount and increase with each change order. The cost of the bonds is based on a percentage of the contract amount.

The Payment Bond guarantees that the contractor will pay all workers, sub-contractors, suppliers and other vendors that have supplied labor, materials or equipment to the bonded project. This bond is usually written with the Performance Bond at no additional charge. On occasion the Payment bond is written on its own.

The Maintenance Bond is a financial guarantee that the contractor will maintain a project for a specified time after completion. Usually the bond, when required, is written at the same time as the Performance and Payment Bond. The Bond is usually written as a smaller percentage of the contract amount, typically 10%.

The Supply Bond is a financial guarantee that a manufacturer or distributor will furnish specified materials at a guaranteed price and time.