Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.
What Are Wyoming Construction Bonds?
Wyoming construction bonds are surety bonds that protect against financial losses that occur when contractors violate state or local construction regulations or fail to live up to their contractual obligations. First, they help prevent infractions by requiring contractors to operate lawfully. Second, when violations do occur, construction bonds provide a way for injured parties to seek compensation for monetary damages.
What Wyoming Construction Bonds May Be Needed?
Some commonly required construction bonds in Wyoming are:
In some cases, these construction bonds are mandated by law for larger government-funded projects. Private project owners may also require them as a condition for awarding contracts. Other Wyoming construction bonds that project owners may require include:
- Contractor license bonds (local only)
- Maintenance bonds
- Subdivision improvement bonds
- Solar decommissioning bonds
- Right of Way bonds
How Do Wyoming Construction Bonds Work?
Every Wyoming construction bond involves three parties with different rights and obligations.
- The obligee is the party requiring the bond,
- The principal is the contractor purchasing the bond, and
- The surety is the party guaranteeing the payment of claims.
The legal obligation to pay valid claims belongs solely to the principal. However, as the guarantor, the surety will pay a valid claim initially, drawing against a line of credit established for the principal for that purpose. The principal must then repay that debt to the surety or face potential legal action.
How Much Do They Cost?
Wyoming construction bonds are offered for an annual premium that is only a small percentage of the required bond amount. The annual premium is calculated by multiplying the required bond amount by the premium rate set by the surety through underwriting.
The premium rate is based largely on the risk of the surety not being repaid for claims paid on the principal’s behalf. The usual measure of this risk is the principal’s personal credit score.
A high credit score means that the risk to the surety is low, so the premium rate will be low as well. A low credit score, on the other hand, signals higher risk, which results in a higher premium rate.
A well-qualified principal typically will be assigned a premium rate in the range of .5% to 3%.
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