What is a Bid Bond in Washington?
A bid bond is one of the types of surety bonds, that guarantees that the bidder will enter into the agreement and complete it according to its terms. The bid bond provides assurance to the project owner that the bidder has the knowhow and wherewithal to complete the job once the bidder is selected after winning the bidding process. The simple reason is that you need one to get the work. But the bigger question is why are more owners/developers requiring a bid bond in the first place? The answer is risk. Given the uncertainty of the marketplace, which includes experienced contractors closing their doors, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable to complete the work. So, they require a some protection.
Just fill out our bond application here and email it to firstname.lastname@example.org - click here to get our Washington Bid Bond Application
A bid bond is issued as part of a bid by a surety bond company to the project owner. The owner is then assures that the winning bidder will take on the contract under the terms at which they bid.
Most bid bonds contain a bid percentage (usually five or ten percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Washington?
Swiftbonds does not charge for a surety bid bond (with two exceptions, see below). The reason that we don't charge for a bid bond is that we will charge for the P&P bond if you get the job. The cost of a P&P bond can vary widely depending on the amount of coverage that is required (see below).
Two exceptions for bid bond charges:
1) We do charge for Overnight fees
2) We will charge you if there is NOT going to be a performance bond.
How much do bonds cost in WA?
Bond prices fluctuate based on the job size (that is, it's based on the cost of the underlying contract). The cost of a bond is estimated through a couple of back-of-the-envelope calculations. In general, the cost is approximately three percent (3%) for jobs under $800,000 and then the percentage is lower as the contract amount increases. We work diligently to find the lowest premiums possible in the state of Washington. Please call us today at (913) 225-8501. We'll find you the very best rate possible for your maintenance bond or completion bond. Things that can affect this pricing are the perceived risk of the job, the financial position of the entity being bonded, plus other factors.
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These rates are for Merit clients, Standard rates are higher
How do I get a Bid Bond in Washington?
We make it easy to get a contract bid bond. Just click here to get our Washington Bid Bond Application. Fill it out and then email it and the Washington bid specs/contract documents to email@example.com or fax to 855-433-4192.
You can also call us at 913-225-8501. We will review each and every application for bid and P&P bonds and then submit it to the surety that we believe will provide the best bid bond for your contract. We have a very high success rate in getting our clients bid and performance bonds at the best rates possible.
What is a Washington Bid Bond?
A bid bond is a bond that provides assurance that you will accept the work if you win the contract. The bid fee (usually five (5%) or ten (10%) percent) is a fine that is paid when you win the bid, but then refuse the work.
Find a Bid Bond near Me
Typically, a bid bond and payment bond are done together in the same contract by the surety. This way, the owner of the project is assured that the project can be completed pursuant to the terms of the contract and that it will not be liened by any contractor. The bond is performance security for the benefit of the owner.
Who Gets the Bond?
The general contractor is the entity that gets the bond. It is for the benefit of the owner (or in the case of government contract work, the governmental entity). It's the general contractor that has to apply for the bond and be underwritten before the performance and payment bond is written by the surety. This is also known as bonding a business.
We provide bid bonds in each of the following counties:
See our West Virginia Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
A Glance At Vital Aspects When Looking At Bid Bonds
Bid Bonds are quite complicated to understand, specifically if you don't recognize how it really works. Most individuals are considering this as an insurance, but this is a kind of guarantee that the principal will do their work properly. Although insurance businesses usually offer a Surety Bid Bond, you cannot really call it insurance because it has a different function. Most individuals would expect you to obtain a Surety Bid Bond before they consider your services as it is a form of guarantee to them.
If you would like to obtain a license bond, permit bond, commercial bond and more, you must know how they really work. We are going to give you info on the importance of Bid Bonds and how they actually work.
A Basic Explanation On Bid Bonds
Bid Bonds will actually be required by the public since it can secure them and it'll guarantee that the principal would fulfill their duties. As the principal, you must obtain a license Surety Bid Bond to guarantee that your company will abide by the laws and you need a contract bond to ensure that a public construction project will be finished. These are only a few examples which will give you an idea about Bid Bonds.
This is made for the customers because they will likely be protected by the bond, but it may also provide benefits to you since they will trust you in case you have this.
The Work Of A Surety Bid Bond
Bid Bonds are a three-party agreement between the principal, the obliged and the surety company. The obliged is actually the project owner and the principal is the employer or company that will perform the work. Construction companies will be asked by the law to get Bid Bonds if they're chosen for a public project. The government will be requiring a construction company to get a host of bonds before they actually work on a certain project. The bond will guarantee that the sub-contractors and the other workers will be paid even if the contractor will default. The contractor will probably be covering the losses, but when they already reached their limit, the duty will fall to the surety company.
How To Apply For A Surety Bid Bond in Washington
Bid Bonds are often provided by insurance providers, but you may seek out some separate surety businesses that specialize in these unique products. Surety companies are licensed by a state Department of Insurance.
It will not be easy to apply for a bond because the applicants will need to proceed through a procedure that is very similar to applying for a loan. The bond underwriters will surely look at the credit profile of the applicant, their financial history and other important aspects.
It only implies that there's still a possibility that you'll not be approved for a Surety Bid Bond, specially once the bond underwriters actually saw something negative.
How Much Are You Going To Spend For This?
There's no fixed cost if you are speaking about a Surety Bid Bond because it will still depend on different reasons like the bond type, bond amount, where the bond will probably be issued, contractual risk, credit score of the applicant and more. There are plenty of bonds available today and the cost will still depend on the type that you will get. The amount of bond is not really an issue because you can get a $10,000 bond or a $25,000 bond. If you actually have a credit score that is above or near 700, you will qualify for the standard bonding market and you should pay about 1 to 4 percent of the Surety Bid Bond amount. If you will obtain a $10,000 bond, it will only cost $100 to $400.
Your Application Could Be Denied
There's a chance that your license and permit bond request will likely be denied by the surety company as it will depend on the things that they will get from the background check. If the surety company thinks that it would be a risk for them to offer you a Surety Bid Bond, they will deny your application. Your credit history is one of the most important factors to be accepted for a surety body because in case you have a bad credit score, it will be difficult to get a Surety Bid Bond.
If you will obtain a Surety Bid Bond even if your credit history is bad, you'll pay an interest rate of 10 to 20 percent.
If you genuinely wish to get your Surety Bid Bond, you need to ensure that you will understand the process so you won't make a mistake. It won't be simple to apply, but if the requirements are met and you are eligible, you will get a Surety Bid Bond.
via Blogger Washington Bid Bonds