What is a Bid Bond in Idaho?
A bid bond is one of the types of surety bonds, which guarantees that the bidder will accept the contract and complete the agreement according to its terms. The bid bond provides assurance to the project owner that the bidder has the knowhow and wherewithal to finish the job once you are selected after the bidding process. The basic reason is that you need one in order to get the job. However, 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 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 complete the work. So, they require a some protection.
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 (5%) or ten (10%) percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Idaho?
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 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.
How much do bonds cost in ID?
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 Idaho. 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 Idaho?
We make it easy to get a contract bid bond. Just click here to get our Idaho Bid Bond Application. Fill it out and then email it and the Idaho 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 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 high success rate in getting our clients bid and P&P bonds at the very best rates possible.
What is a Idaho 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 decide not to take the work.
Find a Bid Bond near Me
Typically, a bid bond and performance/payment bond are done together in the same contract by the surety. This way, the owner 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 for the benefit of the owner.
Who Gets the Bond?
The general contractor is the entity 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 the bid 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 Illinois Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Comparing Basic Information On The Top Reasons To Look For Bid Bonds
Bid Bonds can be very complex, especially if you don't know how it actually works. Most people think of this as a type of insurance, however it is only a kind of guarantee that the principal will do their work according to the contract. 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 get a bid bond before they think about your services since it is a form of guarantee to them.
If you would like to get a bid bond or others, it's important know how they really work. We're going to give you some info about the importance of Bid Bonds and how they work.
An Explanation - Bid Bonds
Bid Bonds will be asked for by the public since it will protect them and it will guarantee that the principal will fulfill their responsibilities. As the principal, you need to get a Surety Bid Bond to guarantee that your company will adhere to the laws and you need a contract bond to make sure that a public construction project will likely be accomplished. There are examples which will offer an idea on bid bond.
This is made for the consumers since they will be protected by the bond, but it may also provide benefits to you because they will trust you when you have this in place.
The Work Of A Surety Bid Bond
Bid Bonds are considered as a three-party agreement between the principal, the obliged and the surety company. The obliged is the project owner and the principal is the employer or company that will do the work. Construction businesses will almost always be required by law to acquire Bid Bonds when they're employed for a public project. The government will require a construction company to secure a host of bonds before they work on a particular project. The bond will ensure that the subcontractors and the other workers will be paid even if the contractor will default. The contractor will cover the losses, but as soon as they reach their limit, the duty will fall to the surety company.
The Application For A Surety Bid Bond
Bid Bonds are offered by insurance organizations, but you can look for standalone surety businesses that will specialize in these products. It will not be simple to apply for a bond because the applicant will have to go thru a strict procedure that is very comparable to applying for a loan. The bond underwriters will still assess the financial history of the applicant, their credit profile and other important aspects to make sure that they qualify to be approved. It also means that there's a chance that you will be denied for a bid bond, especially when the underwriters find something negative on the credit history.
How Much Are You Going To Spend For This?
There is no set rate when applying for a Surety Bid Bond because it can still depend on various reasons like the bond type, bond amount, where the bond will probably be issued, contractual risk, credit history of the applicant and more. There are literally thousands of bonds available today and the cost will depend on the type that you will get. It will not be a problem for the amount of the bond because you can get a $10,000 bond or a $25,000 bond. If you have a credit history that is above or near 700, you will qualify for the standard bonding market and you will pay about 1 to 4 percent of the Surety Bid Bond amount. If you get a $10,000 bond, it will only cost $100 to $400.
Is There A Chance that you could be Declined?
There's a chance that your bid bond request can be denied by the insurance companies and it will depend on the background check that they do. As soon as they feel that giving you a bond will be a big risk, they won't release a bid bond for you.
Credit history is also an issue because if you have a bad credit rating, it would be extremely tough for you to get a Surety Bid Bond as the businesses consider you as a risk. If you have a poor credit score, you could be approved for the bond, but you must pay an interest rate of 10 to 20 percent.
There is a possibility that your application will be denied so you should look into the requirements before applying.
If you are planning to obtain a bid bond, make sure that you know what it can offer. It's not easy to apply for it, but if you understand more concerning this, it will likely be easier to get approved.