[Construction Bond for Contractors | ConstructionBond.ca A construction bond (contract bond) is a legal agreement in which the surety company guarantees that a contractor will perform obligations according to the established terms of a construction contract. In the event the hired contractor fails at completing a job (defaults), does not complete the project in time, or does not to deliver up to specifications that were agreed before the construction contract started, the construction bonds posted by the contractor can be cashed (claim is made on the construction bond) by the hiring party to financially compensate themselves for the losses they incur. In the Canadian construction space, construction bonds are often also referred to as: Contractor bond Construction surety bond Construction completion bond So, have you been asked to post a construction bond for a job? We provide construction bonds for companies across Canada. First thing, there are 3 bonding terms you should to know: Surety – This is the bonding company that provides the surety bond. Obligee – This is who the surety company guarantees to pay out if the contractor defaults on the job and a claim is made. Principal – You, the contractor. Here are how construction bonds work, simply put Step [...]]