Platinum Bonds Insurance Agency
Research before you apply.A Supply Bond guarantees that a materials or equipment supplier will deliver the specified materials, apparatus, or equipment to a construction project according to the supply contract terms. Often used on private projects or as a standalone guarantee separate from performance/payment bonds, this bond protects the pro…
A Supply Bond guarantees that a materials or equipment supplier will deliver the specified materials, apparatus, or equipment to a construction project according to the supply contract terms. Often used on private projects or as a standalone guarantee separate from performance/payment bonds, this bond protects the pro…
Materials suppliers, equipment suppliers, and vendors who have contracts to furnish materials, apparatus, fixtures, machinery, or equipment for construction projects (public or private) may be required by the project owner to provide a Supply Bond as a condition of the supply contract.
Payment bonds guarantee that a contractor will pay subcontractors, laborers, and material suppliers. Typical Pricing:. • Small contracts: Commonly around 1–5% of the contract value. • Larger contracts: Rates generally scale lower as contract size increases. • Payment bonds: Often paired with performance bonds at a combined rate. • Full underwriting required: Credit, financials, experience, and bonding history reviewed. Payment bonds are required on most public proje…
Full underwriting required — typically 3–5 business days
The bond amount for an Illinois Supply Bond equals the total value of the supply contract. The project owner determines the bond amount based on the contract price for the materials, equipment, or apparatus to be delivered. This ensures the owner is protected for the full value of the supply agreement if the supplier fails to deliver.
A Supply Bond protects the project owner against a supplier's failure to deliver materials or equipment as contracted. It covers only the supplier's obligations under the supply contract. In contrast, a Payment Bond (typically required of general contractors) protects subcontractors, laborers, and material suppliers who work under the general contractor, ensuring they get paid. Supply Bonds are narrower in scope and focus solely on delivery performance by the supplier.
Public or private project owners may require a Supply Bond from materials or equipment suppliers as a condition of the supply contract. This is common when the project owner wants assurance that critical materials (steel, HVAC equipment, electrical supplies, etc.) will be delivered on time and per specifications. The requirement is contractual rather than statutory, often seen on larger construction projects or when using standardized AIA contract forms.
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