Non-Construction Performance Bonds

What is a non-construction performance bond?

Non-construction performance (NCP) bonds are surety bonds that guarantee contracts unrelated to a building or construction job. Usually provided by a bank or insurance company, they are issued to one party of a contract as a guarantee against the failure of the other party to meet the obligations specified in the contract. Examples of non-construction performance bonds include janitorial services and landscape maintenance.

How much does a non-construction performance surety bond cost?

The cost of a non-construction performance bond is usually a small percentage of the bond’s total, depending on the applicant’s credit and history with bonding.

Get Your Non-Construction Performance Bond

GET STARTED

Why do I need a non-construction performance bond?

A contractor is asked to provide a non-construction performance bond to reassure the contractor will provide the services or supplies as written in the contract. Non-construction performance bonds give financial protection to the obligee. As with any surety bond, if there is a default that results in a loss by the surety company, the surety will expect the principal to repay any money paid out in case of a claim. Surety bonds are not insurance.

What are the types of non-construction performance bonds?

There are a few types of non-construction performance bonds, and here are the most common:

  • Service Contract Bonds – Service contract bonds relate to a service being provided. These may include security, landscape, window washing, pest control, waste hauling, food service, street sweeping, etc.
  • Supply Bonds — Supply bonds guarantee the delivery of material, equipment, or other supplies as the contract outlines. These types can include office/school supplies, flooring, fencing, work trailers, computer equipment, irrigation equipment, generators, software, wireless installations, among others.
  • Maintenance Bonds — Maintenance bonds are set for a specific period and ensure the property owner or landowner will be compensated for any issues with workmanship, materials, and design after a completed construction project.

How can I get a non-construction performance bond?

Non-construction performance bonds may be purchased from any reliable surety company. You must complete the appropriate application and submit it with a copy of the contract, a request for proposal (RFP), or bid specs. Most surety companies will also ask for business and personal financial statements if the bond is for more than $75,000.

What else should I know about non-construction performance bonds?

Non-construction performance bonds are not renewed but are tied to a contract, so they remain in effect for the duration of the contract. If there are any cost overruns, the surety will bill the principal for any additional amount required.

https://www.gsa.gov/forms-library/performance-bond-other-construction-contracts
https://www.investopedia.com/terms/p/performancebond.asp
https://www.gsa.gov/cdnstatic/miller_brochure.pdf

Questions? Call NNA Surety Bonds at 855-215-2160
Monday to Friday, 6 a.m. to 5 p.m. (PT)