Yes, it's called insurance....with the city/muni as additional insured!

I haven't heard thing like that, we have always done just like Blast said.

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I have run into bond requirements on commercial work quite a bit. Usually, you can't pull a permit without producing a bond. I have never seen a bond put up for liability purposes.
As stated earlier, Insurance is for liability reasons. The bond guarantees you are going to finish the project in accordance with the municipalities requirements. I think is basically to keep "fly by night" contractors from wrecking a building and leaving the debris on site. This way the municipality has has a sufficient guarantee in the form of a bond to ensure the work will be completed.

Nuke is right, it is primarily in place to keep the "fly by nighters" from doing shoddy work. This is not a standard P&P bond. It isn't linked to either performance of work or payment of subs, it is to further insure against damage to city property. I agree with blast that it is somewhat redundant, especially when you can simply add the city as an additional insured. It is simply part of the price of doing business in my fair city.

There are a couple of cities where we file our bonds and have to renew them annually.

A little off topic but I am seeing more and more municipalities prequalifying contractors. You have to submit your financial statements to a comittee and they deterrmine the size of contract you can pursue. It doesn't make a whole lot of sense to me because your could be a well financed corporation and get the "unlimited" rating but if you don't have anybody that knows how to wreck its all moot and vice versa. You can have a guy with 50 years commercial/industrial experience that is just starting out on his own and is limited to house wrecking

It also seems redundant when the State of Alabama requires a demolition contractor (prime or sub) to have a General Contractors license for doing projects of $50,000.00 or greater. It would seem that if you are doing that kind of work in the state then you shouldn't have to spend more money for a bond that your insurance would cover anyway. Such is politics at the local level.

Bud,
Being Demolition Contractors, we are square pegs in a round hole universe.

What's it with holding retainage on a demolition subcontractor anyway? Either the structure is there or it's not. It's not going to grow back.

I know. I once had a client insist on a written guarantee being issued AFTER completion of work. I told him "I can absolutely guarantee that the structure in question will NOT grow back overnight." He released me from that requirement.
Some GC's I have worked for in the past will release my retainage upon completion of my scope, so that's a plus.
We're kind of the redheaded stepchild of the construction industry.

It's even better when the GC gives us a 30 page construction contract and we end up crossing out everything but about 10 words.