Wyoming Bid Bonds
Surety Bond Professionals is a family owned and operated bonding agency with over 75 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your bid bond needs.
What Are Wyoming Bid Bonds?
Wyoming bid bonds are intended to protect construction project owners against monetary damages caused by a contractor not accepting a construction job after being selected as the winning bidder. When a winning bidder backs out, it’s typically because they’ve realized that:
- their bid was too low to make a profit,
- they don’t have sufficient resources for the job, or
- they can’t obtain the performance and payment bonds required by the contract.
A Wyoming bid bond is a contractor’s guarantee to enter into a contract with the project owner (the bond’s “surety”) if chosen for the job. The bond also legally obligates the contractor (the bond’s “principal”) to compensate the project owner for a financial loss caused by failing to live up to that guarantee.
Who Needs Them?
In Wyoming, government contracting authorities (state or local) and private construction project owners alike can require bidders to furnish a bid bond. The required bond amount typically is between 5% and 10% of the principal’s bid price.
How Do Wyoming Bid Bonds Work?
There are three parties to a Wyoming bid bond. In addition to the obligee and the principal is the bond’s guarantor (known as the “surety”).
Although the principal bears the legal obligation to pay a valid claim, the surety has guaranteed its payment. Therefore, the surety will pay the claimant directly, but only as a loan to the principal. The principal must then repay that debt or risk being sued by the surety to recover the funds.
How Much Do They Cost?
In the state of Wyoming, bid bonds are essential. Here's how a surety could handle the bid bond procedure: The obligee, typically the project owner determines the required bond amount and then determines a range between 5% and 10% of the total bid.
When underwriting bid bonds for smaller contracts, the contractor's personal credit history is a key factor in determining financial reliability; however, as projects scale up, the underwriting process gets deeper by conducting a thorough analysis of the project's specific location, the contractor's stability, and a review of their creditworthiness.
At Surety Bond Professionals, we provide bid bonds to Wyoming contractors at no cost when they purchase Performance and Payment (P&P) bonds from us.
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