Surety Bonds
What Is a Supply Bond for Contractors?
A supply bond guarantees that a supplier will deliver specified materials to a construction project. It protects project owners and GCs against material supply default.
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What is a supply bond in construction?
Supply bonds are less common than performance or payment bonds but do appear on large projects where material supply is a critical path item — specialized steel, custom equipment, or materials with long lead times where a supplier default would be catastrophic.
The obligee (project owner or GC) requires the supply bond from the material supplier. If the supplier defaults, the surety arranges for substitute supply or compensates for the cost of finding alternative materials.
As a contractor, you might encounter supply bonds when procuring specialty materials for a bonded public project. Your surety agent can arrange supply bonds for major material purchases where the owner requires them.
Need a surety bond fast?
Trade Safe helps contractors get bonded same-day in most cases. We work with multiple surety markets to find the best rate for your situation.