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Bonds and Insurance Requirements
There are typically four types of bonds that are required for construction contracts and some purchases:
- Bid Bond
- Performance Bond
- Labor and Material Bond
- Guarantee Bond
Commercial general liability and automobile insurance are required for construction contracts and larger goods and services contracts.
The following are types of contracts that require bonds and insurance:
- Construction contracts more than $30,000 require all four types of bonds and insurance
- Performance bonds may be required for service contracts
- Insurance may be required on some commodity contracts and for professional service contracts
- Bid bonds and performance bonds are rarely required on commodity contracts