A street permit bond is a surety bond between a municipality in Massachusetts, the Principal (the contractor) and the surety company. The bond is a guarantee that the Principal understands and will comply with all laws and regulations pertaining to alterations of public ways, will cooperate with government agencies, and will not defraud customers, violate agreements, or act negligently.
This street permit surety bond, like any surety bond, is a three-way agreement between a Principal (the contractor filing for the bond), an Obligee (the municipality requiring the bond), and a surety company (the company backing the bond). This street permit bond is a legally-binding agreement between the Principal and Obligee that guarantees the Principal understands and agrees to fully comply with all rules, regulations, ordinances, and statutes put forward by the Obligee in regards to any and all permitted work on the public way. In the event that the Principal fails to complete the contracted work, violates the terms of the contract or bond, or incurs any financial damages resulting from the project, the surety bond will cover any initial repayments - the Obligee is free from any financial obligation resulting from the project. Once the surety bond makes repayments, the Principal is then obligated to repay the surety for the full amount of damages, including any associated fees or penalties. This surety bond is a protective device from the municipality, as well as the public, from being required to pay for any damages on behalf of the Principal. In the event of a violation, a claim will be filed against the surety bond. The surety company may revoke the bond at any point, and the permitted work will not be allowed to resume until a new bond is filed. Therefore, it is extremely important that the Principal, and all employees, agents, or contractors working under the Principal, clearly understand what is required of them to remain compliant with all agreements of the bond.