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The post How are the cost of surety bonds determined? appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger How are the cost of surety bonds determined?
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One of the questions that we consistently get is what is the rate of the bond? That is, what does the bond cost? Although it is nearly impossible in this short bond post to give you an exact cost for your cost, we can give you some great outlines on the bond rate. For a performance bond, performance and payment bond and other types of contract bonds, the following is what we use for a general rule of thumb on what the bond is going to cost. If the contract underlying the bond is $400,000 or less, then a good rule of thumb is 3%. If the cost of the bond is greater than that, we try and use a sliding scale so that the cost reduces down to 1% at $1.5 million. There are a couple of caveats to this. First, this assumes that your company meets the requirements of a preferred vendor. We recently had a great client that didn’t meet this and ended up with the 3% rate for the bond (which was slightly less than $1 million). This brings us to a great point. Once you start getting bonded, we like to have the company underwritten and pre-approved for a better bond rate. This allows your company to get better rates in the future as well. For probate bonds, we like to use a general rate of 1% for preferred clients and then 2% for “standard” clients. We also have a super preferred rate of 0.5% for many clients as well. I hope that this helps just a bit about the cost of a surety bond for you and your company. The post What is Bond Rate appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger What is Bond Rate What is a Bond Underwriter? A Bond Underwriter is the person that actually approves a bond. In the performance bond context, they are the person that works for the surety and they review the bond application and then approves it and provides the cost for the bond. Let’s break this down. First, an Obligor needs to apply for a surety bond, like a performance and payment bond. So, they will take the job contract and then use it for the specifications to fill out the bond application. Then, they will submit this bond application to their favorite surety bond company, Swiftbonds (shameless, I know), and then we will review the bond application. We determine which surety is the best submittal point and then we send them the application. The bond underwriter will take the application and first determine the size of the contract. The size makes a difference as there are different review processes. In general, if the contract is under $400,000, then it’s a simple credit check and then a quick approval. If the job is more than $400,000, but less than $800,000, the bond underwriter can use company financials, plus a personal financial statement from the owner to get the bond written. Finally, if the job is large (or if the company has any sort of glitch in their credit or financials), the bond underwriter will want to do a full underwriting. This full underwriting can include such things as work-in-progress, plus company financials. The post Bond Underwriter appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger Bond Underwriter
The post Freight Broker Bond Cost Saving Tips appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger Freight Broker Bond Cost Saving Tips What is a Bonded Employee? A Bonded Employee is an employee that has a bond placed on them pursuant to their employment. This type of bond is generally called a fiduciary bond. That is because the employee is serving in some sort of fiduciary capacity such that the employer is wanting them to receive a bond to protect itself against the employee’s bad acts. One type of bonded employee is a public employee, like a county treasurer. Given the large amounts of money that is under their control, the government is likely going to require a bond for their performance. Thus, if the employee takes a bunch of money that is going through their hands, then the county is not stuck in a position where it would have to then sue the employee. Instead, if the employee is bonded, then the county can go to the surety company and have the surety company pay. Then the surety bond company can go after the employee to get paid back. Public notaries are usually bonded as well. If employed, they can get this through their employer. The post Bonded Employee appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger Bonded Employee
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The post Erisa Bonds | Phoenix, AZ – Southwest Bond Services appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger Erisa Bonds | Phoenix, AZ – Southwest Bond Services Is there Surety for Cyber Security through Cashless Transactions? | Pravasa Bharat #1 | TV5 News1/12/2017
The post Is there Surety for Cyber Security through Cashless Transactions? | Pravasa Bharat #1 | TV5 News appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger Is there Surety for Cyber Security through Cashless Transactions? | Pravasa Bharat #1 | TV5 News What is a Surety Agreement? A Surety Agreement is also known as a surety bond. These types of bonds are quite common in the construction industry, where you see a lot of bid bonds, performance bonds and payment bonds. At its core, a surety agreement is a three party agreement between the surety, the Obligee and the Obligor. The surety is the company that is providing a guarantee on behalf of the Obligor. The Obligor is the company that is providing goods or services to the Obligee. The Obligee is the party that would receive money or other recompense if the Obligor is unable to perform. A bid bond is a tri-party agreement. In this surety agreement, the surety is guaranteeing that the Obligor will accept the job that it is bidding on if it is awarded the job. Thus, the Obligee will not be left high and dry if the Obligor does not move forward with the job. In a performance bond, the surety is guaranteeing that the Obligor will perform according to the terms of the contract. That is, the Obligor will build a building accoridng to the architect’s drawings at the timeframe specified in the contract. If not, the surety will find another company to finish the agreement. In a payment bond, the surety is guaranteeing that the Obligor will pay its material vendors as well as any subcontractors. This assures the Obligee that the project will not be unduly delayed by a lien. The post Surety Agreement appeared first on Surety, Contract, Payment, and Performance Bonds. via Blogger Surety Agreement |
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