Warranty Bond - 263

ConsensusDocs 263 is a standard warranty bond form specifically designed to protect project Owners from construction defects that may arise during the one-year correction of work period following project completion. This document plays a vital role in the post-construction phase by providing financial assurance that any defects identified within the correction period will be addressed appropriately by the Constructor or, if necessary, the surety.

This one-page administrative contract form establishes a guarantee from a surety—typically an insurance or bonding company—that promises to correct defects or cover the cost of corrections if the Constructor (which may include the general contractor, builder, design-builder, or construction manager) fails to do so. The Owner, acting as the obligee, benefits from added protection and peace of mind that the completed work meets the agreed standards and quality.

Key Features:

• Designed for a one-year correction of work period
• Establishes the surety’s financial obligation to correct defects
• Clearly defines the maximum liability (penal sum or bond amount)
• Provides assurance to Owners and stakeholders after project closeout
• Suitable for use with the ConsensusDocs 200 and ConsensusDocs 500 series agreements

This warranty bond serves as a crucial risk management tool in the construction industry. It is especially important in design-bid-build projects where the Owner must ensure the quality of workmanship and materials post-construction. By formalizing the constructor’s responsibility and the surety’s guarantee, the ConsensusDocs 263 helps mitigate financial and legal risks associated with defects discovered after a project has been delivered.

Ultimately, this document reinforces trust between construction parties and supports long-term satisfaction with the completed structure by ensuring accountability during the warranty period.