Chapter 2
Types of Surety Bonds
Bid, performance, advance payment, warranty, payment, customs, judicial and commercial surety bonds explained.
Topics in this chapter
2.01
What Is a Bid Bond?A bid bond is a surety bond used as a possible form of bid security where the applicable procurement rules, bidding documents or contract allow it. In Philippine government procurement, the requirement should be read under Republic Act No. 12009, the New Government Procurement Act, its applicable IRR, and the specific bidding documents.
2.02
What Is a Performance Bond?A performance bond supports the Principal's performance of a bonded contractual obligation, subject to the bond terms and the underlying contract. It gives the Obligee a defined remedy if the bonded obligation is not fulfilled, but it does not guarantee project success or automatic payment.
2.03
What Is an Advance Payment Bond?An advance payment bond relates to an advance payment provided under the underlying contract. It supports the Principal's obligation to use, liquidate or return that advance as specified by the contract and bond, subject to the applicable documents and insurer requirements.
2.04
What Is a Warranty Bond?A warranty or maintenance bond may support specified post-completion warranty, maintenance or defects-liability obligations. Coverage is not automatic for every defect or repair; it depends on the contract, bond wording, circumstances and insurer requirements.
2.05
What Is a Customs Bond?A customs bond is a surety bond connected to a specific customs-related obligation. It may support obligations arising from transactions such as warehousing, re-exportation, movement of goods under customs control, or certain importation transactions, subject to Bureau of Customs rules and requirements.
2.06
What Is a Judicial Bond?A judicial bond is a broad category of surety bond connected with a court proceeding or court-ordered undertaking. Requirements depend on the applicable law, Rules of Court, court order, type of proceeding, bond terms, circumstances, and insurer requirements; this guide is general information, not legal advice.
2.07
What Is a Payment Bond?A Payment Bond may support specified payment obligations relating to labor, suppliers, subcontractors or other parties where those obligations are covered by the applicable contract and bond. It does not create universal coverage or automatic payment for every unpaid amount.
2.08
What Are Commercial and Contractual Surety Bonds?Commercial and contractual surety bonds are broad categories. Contractual bonds arise from contracts such as construction, supply or service agreements; commercial bonds support other obligations such as regulatory, customs, court or private undertakings where a bond is required or allowed.
Important Notice
Inquiries and supporting documents submitted through SuretyPH may be referred to the applicable participating insurer for evaluation. Submission does not constitute approval or issuance of a surety bond. Applications are subject to the insurer's requirements, evaluation, underwriting, terms, conditions, and approval.
SuretyPH is a digital platform for surety bond information, inquiries, requirements and request tracking. It does not underwrite, approve, bind, issue, or guarantee any insurance policy or surety bond. Evaluation, underwriting, approval, pricing and issuance are undertaken by the applicable licensed insurance company.