Introduction
Construction work often involves digging deep into the ground. This process is called excavation. While excavation is important for building basements, foundations, or underground parking areas, it can sometimes cause problems for nearby buildings. To prevent these problems and protect neighbours, construction companies often use something called a Lateral Support Bond.
What Is a Lateral Support Bond?
A Lateral Support Bond is a type of surety bond. It protects nearby properties from damage caused by excavation. For example, if a contractor digs close to another building and the soil shifts, it may weaken the neighbouring building’s foundation. Paving Contractor Bond, this bond makes sure that the contractor is responsible for fixing any damage that happens during or after excavation. This bond gives financial security to nearby property owners. If something goes wrong, they can file a claim and get money to repair the damage.
Who Needs a Lateral Support Bond?
Contractors and developers involved in large construction projects typically require this bond. City governments or building departments often require it before issuing construction permits. These permits allow builders to start their excavation work.
Therefore, if a builder plans to dig near existing buildings, they need to obtain a Lateral Support Bond before starting the work. It shows that they understand the risks and are willing to take responsibility.
How Does a Lateral Support Bond Work?
A Lateral Support Bond involves three main parties:
- Principal – The contractor or builder who needs the bond.
- Obligee – The city, building department, or property owner who requires the bond.
- Surety – The company that issues the bond and agrees to cover the costs if the contractor fails to make the necessary repairs.
If damage happens and the contractor doesn’t fix it, the surety company will cover the repair costs. The contractor will later be responsible for repaying the surety company.
Why Is This Bond Important?
Excavation is risky. Soil can shift, and nearby buildings can crack, tilt, or even collapse. The Lateral Support Bond ensures that the people affected by such damage are not left to pay for repairs on their own.
It also helps build trust between contractors, government authorities, and property owners. It shows that the contractor is serious, responsible, and willing to follow safety rules.
Cost of a Lateral Support Bond
The cost depends on the size of the project and how risky the work is. It usually costs between 1% to 5% of the total bond amount. For instance, if the bond amount is $100,000, the contractor may need to pay between $1,000 and $5,000 as a premium.
Conclusion
A Lateral Support Bond is an important part of safe construction. It protects neighbouring properties from excavation-related damage and ensures the contractor is held accountable. For any contractor working near existing buildings, getting this bond is not just a legal step – it’s a smart and responsible choice. With a Lateral Support Bond, everyone can move forward with peace of mind.
