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Construction bonds play a vital role in any construction project. Learn more about these bonds below, or request a quote today.
These bonds guarantee that almost all privately funded projects witness a smooth transition from construction financing to permanent financing. They also provide support to the contractor as well as ensure project completion. On public projects, surety bonds support pre-qualification of contractors, payment protection for subcontractors and contract completion protection for the public.
Here are some of the most common types of construction bonds. Learn more and apply today:
The typical cost for such can be as low as .5% of the contract amount to as high as 3% of the contract value. This is due to several factors, such as the credit worthiness of the construction firm and the amount of bonds they purchase per year.
If a contractor is found to be in default of the contract, a claim can be filed against them. Often times the surety will speak with the contractor. Hopefully, they can come to an agreement about getting things back on track. If this is not possible, then the surety may take over the project by funding the completion of the work and hiring a replacement contractor. If a subcontractor or supplier fulfills their contractual obligation and the contractor does not pay them, they may file a claim. This requires a simple letter to the surety company. In the letter, the subcontractor or supplier explains their justification for filing the claim. The more paperwork the subcontractor or supplier provides the surety bond producer, the better a surety bond producer can make a decision.
Generally, there are two ways to apply for a construction surety bond depending on the size of the project:
This is an application which is determined by the individual’s credit history. A Fast Track application can be used for projects or contracts under $600,000. The fast track application should be submitted with the following items:
This application is to establish a larger surety program for projects over $600,000. The Standard Bond Application will require:
Secure your free nationwide construction surety bond quote now by completing our easy bond application form. Need assistance or have questions? Contact our surety experts for prompt assistance.
