How much do bid bonds cost ?
Some Surety companies provide bid bonds at no cost to established clients. Some charge an annual bid bond Service Undertaking Fee ranging from $250-$500. This fee covers for bid bonds provided usually within a 12 month time period. Other Surety companies may charge a fee for each bid bond.
What is a Performance and Payment Bond?
A performance bond is issued by a Surety Company to the owner of a project guaranteeing that the project will be completed within its set terms and conditions. The Payment bond guarantees that all subcontractors, labor and material suppliers will be paid.
What do Bid Bonds and Performance and Payment Bonds Cost?
Premium rates vary and are based on the contract amount, type of work, etc. Rates typically range
from under 1% of the contract amount to 3% of the total contract amount. Scale
rates are also available for experienced contractors.
What would create a claim under a surety bond?
The Principal's failure to fulfill his obligation would create a claim against a Surety.
Who can make a claim under a bond?
Usually only the holder of the bond (the Obligee), subcontractors
and suppliers can make claim under the bond. The Principal can never make a claim.
What happens if a surety has to pay a claim?
A Principal is legally obligated to reimburse the Surety Company for any loss and expense incurred by the Surety. The Principal's obligation to the Surety can, therefore, be greater than the original obligation to the obligee. The Surety has the same recourse against the Principal as any other creditor would have in recovering their loss. This is the primary difference between a surety bond and insurance.
How do I get a bond?
There are a variety of programs to support new, emerging and established businesses .
Call us 1-617-287-0077 or send us an email today !
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