What is a Bid Bond in Georgia?
A bid bond is a type of surety bond, that guarantees that the bidder will accept the project and complete the contract according to its terms. It provides assurance to the project owner that the bidder has the expertise and wherewithal to complete the job once the bidder is selected after winning the bidding process. The simple reason is that you need one so that you get the job. However, the larger question is why are more owners/developers requiring a surety bid bond? The simple answer is risk. Given the uncertainty of the marketplace, which includes long-term contractors going out of business, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable to complete the work. Thus, they require a some protection.
Just fill out our bond application here and email it to [email protected] – click here to get our Georgia 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 Georgia?
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 contract bond if you get the job. The cost of a bid 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 GA?
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 Georgia. 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 Georgia?
We make it easy to get a contract bid bond. Just click here to get our Georgia Bid Bond Application. Fill it out and then email it and the Georgia bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at (913) 286-6501. We fully review each application for surety bonds and then submit it to the surety that we believe will provide the best bid bond for your job. We have a excellent success rate in getting our clients bid bonds at the best rates possible.
What is a Georgia Bid Bond?
This is a bond that guarantees 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 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. This is risk security for the owner of the project.
Who Gets the Bond?
The general contractor is the corporation 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 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 Hawaii bid bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Trouble-free Recommendations When Thinking Of Bid Bonds
It’s correct that Bid Bonds are quite complicated, particularly if you don’t have any idea how they work. Most folks are thinking of this as insurance, but this is a kind of financial guarantee that the principal will do their work properly. Insurance providers can provide a Surety Bid Bond, but this is not insurance because its function is different. Most individuals will require you to get a Bid Bond before they consider your services as it is a kind of guarantee to them.
If you’d like to consider applying for a bid bond, you must understand how they work. We will give you some information about the importance of them and how they work.
The Significance Of A Surety Bid Bond
Bid Bonds are always in demand because they protect the public. It is a type of assurance that the obligations and duties will be completed. You must get a license bond to make sure that the company will follow the laws of the state and you get a contract bond to make certain that the public project will be completed. A bid bond is meant for the obliged as they are the ones which are being protected, but it will also be to your benefit as your clients will trust you in case you have this. There are lots of bonds today and the type of bond that you will need depends upon the specific situation.
How Does It Work?
Bid Bonds are a three-party agreement between a surety company, the principal and the obliged. The principal is the employer or company that will perform the work while the obliged is the project owner.
Construction companies are required by law to get Bid Bonds when bidding for a public project. When the government has to do a public project, the winning contractor must secure a number of bonds.
The bond will ensure that the subcontractors and the other workers will be paid even if the contractor defaults. The contractor would be responsible in covering the losses, but once they have reached their limit, the duty falls to the surety company.
Applying For A Surety Bid Bond
Insurance companies sometimes offer Bid Bonds, but there are standalone surety businesses that specialize in these unique products. Surety businesses are typically licensed by a state Department of Insurance so you have to check it first prior to deciding. It will not be easy to apply for a bond because the applications will need to proceed through a background checking procedure. The bond underwriters will first review the financial history of the applicant as well as credit profile and other key factors.
This means there is a chance that you won’t be approved for a bid bond, especially if you have a bad credit rating.
How Much Do You Have To Spend?
It is hard to estimate an exact cost for a bid bond because the cost can be impacted by numerous factors like the bond type, bond amount, where it will be issued, contractual risk, credit history of the applicant and more. There are thousands of different bonds available today and the cost will depend upon the bond that you get. The amount of the bond will be a factor because you can pick a $10,000 bond or a $25,000 bond or higher.
If you have a credit history of 700 and above or very near this number, you could be eligible for the standard bonding market and you only have to pay 1 to 4 percent of the Surety Bid Bond amount. For example, if you need a $10,000 bond, you only have to pay $100 to $400.
Is There A Chance Of Being Rejected?
There’s a chance that your bid bond request could be denied by the insurance providers and it’ll depend on the background check that they do. If they determine that providing a bond to you will be a big risk, they won’t release the bond for you.
Credit history is also a big factor since if you have a bad credit score, it will be hard for you to get a bid bond because the companies are considering you as a risk. If you have a bad credit rating, you can still be accepted for the bond, but you could pay a rate of 10 to 20 percent.
There’s a chance that your application will be refused so you have to check the requirements before you apply.
If you are planning to get a surety bid bond, make sure that you understand what it entails before you decide. It’s hard to apply for, but if you know more concerning this, it will be easier to be approved.