Bonds Performance Guarantees and Insurance Sample Clauses
The "Bonds, Performance Guarantees and Insurance" clause requires parties to provide financial security and risk mitigation instruments to ensure contract obligations are met. Typically, this involves the contractor supplying performance bonds or guarantees from a bank or insurer, and maintaining specified insurance policies such as liability or property insurance throughout the project. This clause protects the client by ensuring compensation or remedy is available if the contractor defaults or causes loss, thereby allocating risk and promoting project completion as agreed.
Bonds Performance Guarantees and Insurance. 7.1 Maintenance Payment and Performance Bonds and Retainage Bonds
7.1.1 On or before 60 Days after issuance by TxDOT of Maintenance NTP1, Maintenance Contractor shall provide to TxDOT, and shall maintain at all times, (i) a Maintenance Performance Bond and a Maintenance Payment Bond, in the forms attached as Exhibit 6 and Exhibit 7 respectively that shall guarantee the performance of the Maintenance Services and shall also guarantee payment to Persons performing certain work for Maintenance Contractor under this Capital Maintenance Agreement; and (ii) a Retainage Bond in the form attached as Exhibit 8. The Retainage Bond shall be in the amount of 4% of the Maintenance Price, and is to be used as a guaranty for the protection of any claimants and TxDOT for overpayments, Liquidated Damages, and other deductions or damages owed by the Maintenance Contractor in connection with this Capital Maintenance Agreement.
7.1.2 Each bond required hereunder shall be issued by a Surety authorized to do business in the State with a rating of at least A minus (A-) or better and Class VIII or better by A.M. Best Company or rated in the top two categories by two nationally recognized rating agencies, or as otherwise approved by TxDOT in its sole discretion. If any bond previously provided becomes ineffective, or if the Surety that provided the bond no longer meets the requirements hereof, Maintenance Contractor shall provide a replacement bond in the same form issued by a surety meeting the foregoing requirements, or other assurance satisfactory to TxDOT, in its sole discretion. If the Maintenance Price is increased in connection with a Change Order, TxDOT may, in its sole discretion, require a corresponding proportionate increase in the amount of each bond or alternative security.
7.1.3 The Maintenance Performance Bond and the Maintenance Payment Bond shall each have a term equal or greater to the then-current Maintenance Term. During each such period, the amount of each bond shall be equal to 75% of the aggregate sum of the remaining annual Maintenance Price for all years of the applicable Maintenance Term, using the current annual Maintenance Price as the annual Maintenance Price for each year remaining in the Maintenance Term; provided however, the amount of each bond shall not be less than 100% of the then current annual Maintenance Price. Separate Maintenance Performance Bonds and Maintenance Payment Bonds shall be provided by Maintenance Contractor in the amount of any...
Bonds Performance Guarantees and Insurance