So imagine you’ve invested hundreds of thousands of dollars into a civil construction project—maybe a bridge or a building. You would want some sort of assurance—asides from the performance bond—that your contractor did a proper job, and that they will be around to assist in case something goes wrong.
That’s where maintenance bonds come in.
Maintenance bonds are an optional surety agreement that covers the period immediately following a project’s completion. With a maintenance bond, project owners can be assured of:
A Minimum Operating Period
Maintenance bonds guarantee a standard of performance for the warranty period (at the very least). It also offers protection against poor workmanship, which may become evident during the warranty period and require the contractor to do additional work.
Design defects are also covered by the warranty period, especially if they are crippling flaws that hamper the project from being used as it was intended. If a design defect appears, the contractor will be obligated under the bond to correct it.
Guaranteed Maintenance and Upkeep
Even if there are no design flaws or bad workmanship to correct, finished projects still needs to be maintained—some more than others. And who better to maintain them than the team who built it in the first place?
The maintenance bond requires the contractor to provide regular upkeep and repairs to the finished project for the stated period, after which the project owner has to either hire someone else to take over or do it themselves.
If the project’s contractor somehow goes out of business during the maintenance bond period, the surety can help the owner find another contractor to perform maintenance instead.
Likewise, if the contractor runs into a maintenance problem that it can’t handle, the surety can help facilitate a search for a qualified specialist or some other means of honoring the bond.
Patrick Icasas is a freelance writer based out of Mississauga, Ontario.