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Surety Bonds

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Surety bonds since 1996.

Performance and payment surety bonds are a great way to guarantee that a large investment in a project is not lost if a construction contractor fails to fulfill the terms of a construction contract.

This type of protection is nearly always required in taxpayer funded projects whether federal government, state government, or local government.  Although not mandated by law, the private sector also benefits from performance and payment bonds for many of the same reasons. These are just two examples out of the thousands of surety bonds used to guarantee obligations.  GMGS specializes in Bid, Performance, Payment, Subdivision, License, Permit and Court Bonds.

A surety is a widely used but unusual form of protection.  It is a promise to be liable for the debt, default, or failure of another.  A surety bond is a three-party contract by which one party (surety bond company) guarantees the performance of a second party (principal) to a third party (obligee).  This is different than an insurance contract which is between two parties – the insurance buyer and the insurance company.

It’s easier to understand a surety bond obligation with a performance and payment bond example. Imagine a general contractor is building a new office building for a government agency. The agency wants a guarantee that the taxpayer won’t be left out of pocket if the general contractor fails to deliver the offices as promised.

The answer is a surety bond.  The performance bond guarantees that the project will be constructed according to the plans and the payment bond guarantees that the general contractor (principal) will pay its subcontractors and suppliers on the project.  If the general contractor fails to deliver the project as agreed, the government agency can file a claim with the surety bond company.  The surety bond company will then ensure that the project is completed, and subcontractors and suppliers are paid what is owed to them so that the government agency, and by extension taxpayers, are made whole.

GMGS provides surety advice to clients ranging from small and emerging businesses to bond programs over $200,000,000.  Now, more than ever, the surety relationship depends on the strength of your balance sheet and the leveraging ability of your surety bond broker.

We differentiate our surety bond clients by focusing on their unique strengths and offering specialized services to address key areas of improvement.  A thorough understanding of our client’s organization creates greater comfort in the surety relationship translating into increased surety capacity and better bond rates for our clients.

Our dedicated surety team provides access to critical surety bond markets combined with value added support in the following areas:

  • Strategic Consultation
  • Surety Bond Program Placement
  • Contract Review and Analysis
  • Bond Form Language Review
  • Subcontractor Bond Review and Verification
  • Industry Reports
  • Bond Claim Advice

Contact us today for all of your surety bond needs!

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GMGS Risk Management & Insurance Services
6201 Oak Canyon, Suite 100
Irvine, CA 92618

Providing innovative Risk Management and Insurance Brokerage Services for over 24 years.
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