For contractors and building professionals, a Performance and Payment Bond is essential for any kind of new construction or remodeling projects. Lenders financing your projects often require proof of that bonding, and many potential clients will request it as well before signing a contract.
For the contractor being bonded, bonding basically guarantees that if you fail to complete a job or project as agreed or contracted, your client can file a claim with the holder of your bond. In addition, the bond protects your client’s property against mechanic’s liens filed by unpaid suppliers or sub-contractors. If a claim is determined to be valid, you would be considered responsible for all claim costs.
Typically, bond issuers charge anywhere from one to three percent—sometimes more—of the bond’s maximum coverage amount. However, at Honsador Lumber, we provide bonds to our clients—qualified licensed general contractors and owner builders who partner with Honsador for their residential projects—free of charge.
Commonly termed Material House Bonds, our bond provides both performance and payment protection to ensure that your construction project is completed according to the job’s contract plans and specifications and that all related expenses are paid.
At Honsador Lumber, we’ve been providing bonding to our clients for more than 30 years, and our surety is recognized and accepted by the financial lenders, banking institutions, companies within the construction industry and even U.S. government agencies doing business across the Hawaiian Islands.
If you need bonding for your construction projects, our experienced bonding professionals have provided the necessary bonding to thousands of other contractors, and they can help you navigate the process too.
As with any financial process, you’ll have to fill out some forms, but our Bond Application Job Cost Breakdown is a worksheet you may find as valuable and useful to your operations as it is to ours. To get you started, we’ve loaded our forms and checklists for support documentation online:
Current Credit Application & Agreement on File
Honsador Lumber is agreeing to stand behind your work, which is a financial commitment, so as the primary contractor, you’ll need to set up a credit account with us if you don’t have one already.
Current Financial Statement on File
We offer this form both standalone and as the last page of the Credit Application because we ask that you complete a financial statement for both you personally and your company.
Executed Indemnity Agreement on File
Even though Honsador Lumber provides a bond for your work, the Indemnity Agreement specifies that you are still ultimately financially responsible. It also gives Honsador Lumber certain responsibilities and powers to enforce the contract.
Completed Bond Application/Job Cost Breakdown
While the other documents focus on your company’s finances, the Bond Application is a detailed accounting of all the details of your project or job. At the end of the form is a checklist of additional support documentation needed to help ensure your information is complete and to avoid delays. Some of the items include copies of:
- your subcontractors’ bid proposals;
- the executed Construction Contract;
- all addendums and revisions;
- the executed Specifications form;
- the plans stamped and signed by the owner and contractor;
- your building permit;
- a current Insurance Certificate on file that includes comprehensive, workman’s compensation, and owner’s fire insurance for the value of the completed dwelling;
- job references if you are a first-time bond applicant; and
- a complete materials list.
We understand that your time is valuable, so we ask only for the information we both need to do our jobs, and our credit and finance experts are always ready to assist you with the process. If you’re ready to partner with Honsador’s building materials specialists and want bonding through us, stop by your nearest island location. You can find us in Kapolei, just outside Honolulu, on Oahu as well as in Kahului on Maui, in Kona and Hilo on the Big Island, and in Lihue and Kilauea on Kauai. Let us see what we can do for you.