What is a Bid Bond in Delaware?
A bid bond is a type of surety bond, 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 expertise and ability to finish the job once the bidder is selected after the bidding process. The basic reason is that you need one in order to get the job. But the larger 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 to finish the work. So, they require a some protection.
Just fill out our bond application here and email it to [email protected] - click here to get our Delaware 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 5% or 10%, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Delaware?
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 P&P bond if you win the contract. The cost of a surety performance 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 DE?
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 Delaware. 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 Delaware?
We make it easy to get a contract bid bond. Just click here to get our Delaware Bid Bond Application. Fill it out and then email it and the Delaware bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at 913-225-8501. We fully review each 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 Delaware 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 or ten 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 P&P 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 company that gets the bond. It is for the benefit of the owner (or in the case of government contract work, the governmental entity). However, 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 performance and payment bonds in each of the following counties:
See our Florida bid bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
News On How To Locate Bid Bonds
Bid Bonds can be very complicated to know, especially if you don't know how it actually works. Most folks think of this as a kind of insurance, however it's only a kind of guarantee that the principal will perform their work effectively. Insurance businesses usually offer a Surety Bid Bond, but you cannot call it insurance because its function is different. Most folks would require you to get a Surety Bid Bond before they think about your services as it is a type of guarantee to them.
If you wish to consider a license bond, permit bond, commercial bond and more, you must know how they work. We're going to give you info on the significance of Bid Bonds and how they actually work.
The Significance Of A Surety Bid Bond
Bid Bonds will always be in demand as they often protect the public. This is a kind of guarantee that the obligations and duties will probably be finished. You must get a license Surety Bid Bond to make sure that your company will follow the laws and you usually get a contract bond to guarantee that a public project will probably be completed. Normally, a Surety Bid Bond is intended for the obliged since they are the ones that are being protected, but it would benefit you as well since the clients will trust you in case you have this. There are lots of bonds today and the type of bond that you want to look for will depend on the specific situation.
The Work Of A Surety Bid Bond
Bid Bonds are referred to as a three-party agreement between the principal, the obliged and the surety company. The principal is the employer or company that can carry out the work and the obliged is known as the project owner. Construction organizations will probably be asked by the law to get Bid Bonds when they're hired for a public project. The government will actually require a construction company to help secure a host of bonds before they work on a certain project. The bond will guarantee that the subcontractors and the other workers would be paid even if the contractor will default. The contractor will probably be covering the losses, but when they reached their limit, the duty would fall to the surety company.
The Application For A Surety Bid Bond
Bid Bonds are actually offered by insurance organizations, but you may always search for standalone surety organizations that would concentrate on these products. It will not be simple to apply for a bond as the applicant will need to experience a rigid process that is similar to applying for a loan. The bond underwriters will certainly evaluate the financial history of the applicant, their credit profile and other important aspects to assurance that they will be approved. It signifies that there's a chance that you will be denied for a Surety Bid Bond, especially when the underwriters found something bad on the credit history.
How Much Are You Going To Spend?
There's no specific cost for a Surety Bid Bond since it will depend on a number of reasons like the bond type, bond amount, where the bond will be issued, contractual risk, the credit score of the applicant and a lot more.
There are thousands of bonds available today and the cost will depend upon the type of bond that you want to obtain. The amount of bond that you'll is also an issue because you could obtain a $10,000 bond or a $25,000 bond.
In case you have a credit score of above or near 700, you will be eligible for the standard bonding market and you are going to only pay a premium that's 1 to 4 percent of the Surety Bid Bond amount. If you may get a $10,000 bond, it will cost around $100 to $400.
Is There A Chance To Be Rejected?
There is a chance that your license and permit bond request will likely be rejected by the insurance businesses and it will depend upon their background check. If they feel that giving you a bond is a huge risk, they will not release a Surety Bid Bond for you.
Credit score is also a factor because in case you have a bad credit history, it would be very hard for you to get a Surety Bid Bond as the companies consider you as a risk. In case you have a bad credit rating and you were approved for the bond, you usually have to pay an interest rate of 10 to 20 percent.
There is a chance that your application will likely be refused so check all the requirements before you apply.
You must understand that a Surety Bid Bond is vitally important for businesses, specially if they are considering a government project. Bid Bonds will definitely be used for a lot of things, but they have one thing in common - they always protect the obliged.