Texas Construction Bonds & Surety Bonds
Construction Bond & Surety Bonding Alternatives
Texas Surety Bonds are subject to the laws of the State of Texas. The most common types of Construction Bonds for Texas contractors are as follows:
Bid Bonds: Required when Request is sent out by company seeking construction bids. The
winning bidder must supply a Performance Bond (or Payment Bond) before it starts the project.
Performance Bonds: A Performance Bond coverage guarantees that the principal will "faithfully perform the terms and conditions of the written contract" In the State of Texas, the Perfomance Bond is needed for the following:
- Federal Construction Projects (The Miller Act (40 U.S.C., Sections 3131-3134);
- Public Texas Governmental Entities work for contracts over $100,000 (Government Code, Chapter 2253)
- Private Work - In some cases an owner may also request a Performance Bond for private work.
Payment or Labor and Material Bonds: The Payment or Labor and Materials Bond guarantees that the contractor will pay for labor and material used to complete the project that is the subject of the contract. Payment or Labor and Material Bond is also required for the following in the State of Texas:
- Federal Construction Projects (The Miller Act);
- Texas Public Work of $25,000 (Government Code, Chapter 2253);
- Texas Private work under Property Code, Chapter 53.
Maintenance Bonds: Maintenance Bonds cover defective workmanship and materials. Maintenance Bonds or Maintenance Guarantees for up to 12 months are regularly required in addition to Performance Bonds in Texas. Maintenance Bonds can also be needed when no Performance Bond is required.
Source: State of TX Dept of Insurance
Texas Surety Bonds | Construction Bond Resources
Disclaimer: This page is not
meant to provide conclusive legal definitions of construction surety bonds.
It is only to serve as a reference by which you may conduct further research
into the legalities of construction surety bonds. The contents of this web
site are subject to change / revision without notice.
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