Performance Bonds under $125,000 (view Brochure)

Do not qualify ? OR Do not require a full bonding program ? We have the solution.

GUARANTEED APPROVAL for jobs where the bond amount is $125,000 or less, with a Municipal Works bond.

Ai Surety Bonding has a strong track record of working with contractors attain bonding facilities. We consistently work with municipalities and public buyers to get the most value from their surety bond product.

Municipalities hesitate to get performance and labour and material payment bonds on smaller projects for two reasons:

• The bond premium adds a significant cost to the project
• Smaller projects are typically done by smaller contractors, who are often unable to obtain a bonding facility

As a result, for contractors completing these smaller projects, municipalities have required a letter of credit or certified cheque as part of their prequalification process.

The system has worked to a degree, but there remains the issue of tracking the security and since municipalities prefer to prequalify less frequently, many have turned to a 3 year term- resulting security being held for this extended term.

Contractors also prefer to hold onto their money and the municipalities would rather not have the added administrative responsibility.

Seeing both sides of this dilemma we have decided to offer a hybrid bond which addresses these issues without requiring a contractor to have an ongoing bonding facility.

There have historically been 2 types of surety bonds:

• Contract Surety - Construction bonds which guarantee a construction contract such as bid bonds, performance bonds and labour & material payment bonds
• Commercial Surety - Annual bonds which guarantee a license or permit typically

We offer those 2 distinct types of surety guarantees in one - a new category which replaces Letters of Credit and Certified Cheques.

Electronic Bonds

The option of an electronic bond is available and can be digitally signed and emailed to the contractor client. A copy of the bond is made available for viewing by the municipality via the internet in an encrypted format.

Availability

Canada only

Approval

The contractor is guaranteed approval, HOWEVER, be sure the obligee/municipality will accept this newly designed surety bond. Contact us to determine if your local municipality has approved use of the Municipal Works bond.

Wording

Click here.

Turn Around Time

If the obligee (municipality or other public entity requesting this bond) wishes to receive the bond using a digital signature - we are able to email the document within 24 hours of receipt of application and payment.

Otherwise, the original bond document will be sent to you within 2 days of the application being submitted and payment received. Pick-up arrangements are also available.

Cancellation

The premium is fully earned and should you cancel midterm there will be no refund.

Application

Click here.

Benefits for Municipalities

• No need for a tracking system to confirm status. The bond is valid until cancelled ie. If a cancellation notice is not received, the security is valid.
• Most municipalities request $10,000 in security. The Municipal Works Bond makes $20,000 available in security.
• Bond provides a one year maintenance term. This benefit is not available without this bond
• Local, smaller companies, will not be prevented from doing work for the municipality due not qualifying for a standard bond
• More bids and competition on tenders as contractors now have attractive way of posting security

Benefits for Contractors

• Money no longer held by municipality for the term of their RFP - whether that be 1 year or 3
• The bond premium is fixed and reasonably priced
• In the case of a claim there will be an investigation to ensure the claim is supported
• You do not need to qualify financially as you do with a standard bond facility.
• No financial reporting
• If you currently have a bonding facility this bond does not interfere with it. This is a one-off policy and is of no interest to your current bonding company.