What is a Bid Bond in Arkansas?
A bid bond is one of the types of surety bonds, that guarantees that the bidder will accept the contract and complete it according to its terms. The bid bond provides assurance to the project owner that the bidder has the ability and ability to finish the job once the bidder is selected after the bidding process. The basic reason is that you need one to get the job. But the bigger question is why are more owners/developers requiring a bid bond in the first place? The basic answer is risk. Given the uncertainty of the marketplace, which includes long-time contractors going bankrupt, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable complete the job. Thus, they require a some protection.
Just fill out our bond application here and email it to [email protected] - click here to get our Arkansas 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 Arkansas?
Swiftbonds does not charge for a 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 contract bond if you win the contract. 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 bond on the contract.
How much do bonds cost in AR?
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 Arkansas. Please call us today at (913) 286-6501. 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 Arkansas?
We make it easy to get a contract bid bond. Just click here to get our Arkansas Bid Bond Application. Fill it out and then email it and the Arkansas bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at (913) 286-6501. We will review each and every application for surety bid bonds and then submit it to the surety that we believe will provide the best bid bond for your company. We have a great success rate in getting our clients surety bid bonds at the best rates possible.
What is a Arkansas Bid Bond?
A bid bond is a bond that guarantees that you will accept the work if you win the contract. The bid fee (usually five (5%) or ten (10%) percent) is a damages calculation that is paid when you win the bid, but then back out of doing the work.
Find a Bid Bond near Me
Typically, a bid bond and payment and performance 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 risk security insurance for the benefit of the owner.
Who Gets the Bond?
The general contractor is the corporation that obtains 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 it is written by the surety. This is also known as bonding a business.
We provide bid bonds in each of the following counties:
North Little Rock
See our California bid bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Comparing Basic Details On The Top Reasons To Look For Bid Bonds
Surety Bid Bond is something vitally important for anybody, but it's a little complex if you do not know anything concerning this. Generally, this is not an insurance claim, however it is a kind of guarantee that you, as the principal, will perform the work properly for the obliged.
You have to know that most folks will actually expect you to obtain a particular bond before they consider your services since it will be a guarantee for them. Since they need this kind of thing from you, it's important to seek out an insurance company which will provide this to you.
If you truly want a license bond, permit bond, commercial bond and more, you have to know plenty of things about Bid Bonds. Here are some of the essential things that you must know.
What Exactly Is A Surety Bid Bond?
Bid Bonds are actually created to protect the public since they are a kind of guarantee that the obligation will likely be achieved. You should get a license Surety Bid Bond to guarantee that your company will stick to the laws and you get a contract bond to guarantee that a public construction project would be finished.
These are simply some of the examples that are frequently used to describe Bid Bonds and how they work. It'll also benefit you since the clients will put their trust in you if they will be protected by bond.
There are thousands of bonds that exist right now and the type of bond that you'll require would depend on your circumstance.
How Does It Work?
Bid Bonds are actually regarded as a three-party agreement among a surety company, the principal and the obliged. The principal is the employer, individual or company that will perform the work while the obliged is the project owner.
Construction businesses are required by the law to get Bid Bonds once they are picked for a public project. When the government needs to finish a public project, the winning contractor should secure a host of bonds.
The bond will guarantee that the subcontractors and other workers will likely be paid even when the contractor defaults. The contractor will likely be responsible in addressing the losses, but as soon as they reached the limit, the duty will fall to the surety company.The contractor will cover the losses, but once they actually reached the limit, the duty will obviously fall to the surety company.
How To Apply For A Surety Bid Bond
Bid Bonds are typically provided by insurance providers, but you'll find some standalone surety businesses that would concentrate on these products. Surety businesses are licensed by a state Department of Insurance.
Applying for a bond isn't as easy as you believe as the applicants will encounter a process much like a loan approval. The bond underwriters will review the financial history of an applicant, credit profile, managerial team and other key factors.
It would mean that there's a chance that you will not be accepted for a Surety Bid Bond, particularly if the bond underwriters saw something negative.
The Cost Of A Bid Bond
You can expect that a Surety Bid Bond won't have a set cost as it will depend upon different reasons such as bond type, bond amount, where the bond will be issued, contractual risk, the credit history of the applicant and many more.
There are plenty of bonds available right now and the cost will invariably depend on the type of bond that you are going to get. The amount of bond that you'll get may also be an issue because you can obtain a $10,000 bond or a $25,000 bond.
If you have a credit score of above or near 700, you will really qualify for the standard bonding market and you only have to pay a premium that is 1 to 4 percent of the Surety Bid Bond amount. If you will get a $10,000, it will cost around $100 to $400.
Is There A Chance Of Being Denied?
There is a chance that the bond can be denied by the underwriter and it will depend on the background check that they did. If they think that it's going to be a big risk to give you a bid bond, they will probably deny your application. Credit history will also be a deciding factor because if you actually have a bad credit rating, it's going to be hard for you to get a Surety Bid Bond because organizations are considering you as a risk. For those who have a bad credit rating, you may still be approved, but you will have to pay an interest rate of 10 to 20 percent.
If you want to get a bid bond, you need to be sure that you understand the process so you will not make a mistake. It won't be simple to apply, but if the requirements are met and you are eligible, you will get bonded.