Contract Surety Bonds
Contract bonds, also known as bid, performance & payment bonds, are often required by entities that hire contractors. Unlike license bonds, contract bonds cover a contractor for a particular project and are sold on that basis.
Premium And Applications
For bonds that are required for commercial jobs that are under $200,000, getting a bond is a relatively easy process. All we require is the following three page application to be faxed or mailed to us:
>>> Fast Track Contract Bond Application <<<
Qualified applicants will be contacted within 24 hours after we recieve a properly completed application. The premium for these bonds is 3% of the contract price, with a minimum premium of $100.
Contract bonds for commercial jobs larger than $200,000 or residential work require quite a bit more paperwork and time to get done. The appplication package below has the details on what will be required to obtain a bond of this size:
>>> Large Contract Bond Package <<<
The price on these bonds vary according to the size of the job and the experience of the contractor. Prices start at 3% on jobs just over $200,000 and can be as low as 0.5% on very large jobs.
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Bid Bonds
A Bid Bond is submitted by the contractor along with his bid for a specific project. It is usually in an amount of 5% to 20% of his total bid (with 10% being the most common amount). A Bid Bond provides the owner of the project with some financial assurance that should this contractor be awarded the construction project, he will enter into the contract with the owner and also post a Performance and Payment Bond.
Performance Bonds
A Performance Bond is submitted by the contractor to the owner of the project once he has been awarded the job. A Performance Bond guarantees contract performance by the contractor, according to the contract specifications, terms and conditions. The surety company's capital and surplus backs this guarantee up to the financial limit of the bond (which is often at 50% or 100% of the full contract amount).
Payment Bonds
A Payment Bond is also submitted by the contractor to the owner of the project once he has been awarded the job. A Payment Bond guarantees that this contractor will pay certain bills for labor and materials (including those from subcontractors and suppliers) which are associated with this contract. The surety backs this guarantee up to the financial limit of the bond (which is often at 50% or 100% of the contract amount).
