What is a Bid Bond in Indiana?
A bid bond is one of the types of surety bonds, that guarantees that the bidder will accept the contract and complete the contract according to its terms. The bid bond provides assurance to the project owner that the bidder has the expertise and capability to complete the job once you are selected after the bidding process. The simple reason is that you need one to get the contract. However, the bigger question is why are more owners/developers requiring a bid bond? The simple answer is risk. Given the uncertainty of the marketplace, which includes long-term contractors closing their doors, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable finish the job. 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 Indiana 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 (5%) or ten (10%) percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Indiana?
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 performance bond if you win the contract. The cost of a 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 IN?
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 Indiana. 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 Indiana?
We make it easy to get a contract bid bond. Just click here to get our Indiana Bid Bond Application. Fill it out and then email it and the Indiana bid specs/contract documents to email@example.com or fax to 855-433-4192.
You can also call us at 913-225-8501. We fully review each and every application for bid bonds and then submit it to the surety that we believe will provide the best surety bond for your contract. We have a great success rate in getting our clients bid and performance bonds at the best rates possible.
What is a Indiana Bid Bond?
A bid bond is a bond that assures 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. This is performance security for the owner of the project.
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). 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 Iowa Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Suggestions - When Thinking of Bid Bonds
Bid Bonds might be very complicated to understand, specifically if you don't recognize how it actually works. Most individuals consider this as insurance, but it's actually a type of guarantee that the principal will perform their work properly for the obliged. Insurance companies usually offer a Surety Bid Bond, but you cannot call it insurance because its function is different. Most individuals will surely require you to get a Surety Bid Bond before they think about your services as it is a form of guarantee to them.
If you'd like to consider a license bond, permit bond, commercial bond and more, you must understand how they work. We will offer you info on the significance of Bid Bonds and how they actually work.
The Importance Of A Surety Bid Bond
Bid Bonds will almost always be in demand to protect the public because it is a kind of assurance that your obligations and duties will probably be complete. You must get a license Surety Bid Bond to ensure that your company will stick to the laws and you usually get a contract bond to guarantee that a public project will be completed. A Surety Bid Bond is surely meant for the obliged since they are the ones that are being protected, but it may also benefit you because the clients will trust you in case you have this. There are thousands of bonds right now and the type of bond that you are trying to find would depend upon your situation.
The Primary Work Of A Surety Bid Bond
Bid Bonds are a three-party agreement between the principal, the obliged and the surety company. The principal is the employer or company which will perform the work and the obliged is known as the project owner. Construction companies will almost always be required by the law to acquire Bid Bonds if they're chosen for a public project. The government will probably be requiring a construction company to get a host of bonds before they actually work on a certain project. The bond will ensure that the sub-contractors and the other workers will probably be paid even if the contractor will default. The contractor will cover the losses, but when they reached their limit, the duty will fall to the surety company.
How To Apply For A Surety Bid Bond
Bid Bonds are provided by insurance providers, but you could have some standalone surety businesses that focus on these products. A surety company must be licensed by a state Department of Insurance.
It won't be easy to apply for a bond since the candidates will have to go through a process that is very comparable to applying for a loan. The bond underwriters will certainly look into the credit profile of the applicant, their financial history and other key factors.
It means that there is a chance that you won't be approved for a Surety Bid Bond, particularly once the bond underwriters saw something from your credit rating.
How Much Do You Must Spend?
You cannot really put an exact cost for a Surety Bid Bond because the cost might be affected by numerous factors like the bond type, bond amount, where it will likely be issued, contractual risk, credit history of the applicant and more. There are definitely thousands of different bonds available today and the cost will depend on the bond that you want to get. The amount of the bond will likely be a factor because you could always select a $10,000 bond or a $25,000 bond or higher.
If you already have a credit history of 700 and above or very near this number, you can be eligible for the standard bonding market and you just need to pay 1 to 4 percent of the Surety Bid Bond amount. It means that if you may obtain a $10,000 bond, you only have to pay $100 to $400 for the interest.
Your Application Could Be Rejected
There is actually a possibility that your license and permit bond request will likely be refused by the surety company since it will usually depend upon the information that they can get from the background check. If the surety company thinks that it will likely be a risk to give you a Surety Bid Bond, they will obviously deny your application. Your credit history is one of the most important factors to be approved for a surety body because if you have a bad credit history, it will likely be hard to get a Surety Bid Bond.
If you can get a Surety Bid Bond even if you have a bad credit score, you will truly pay an interest rate of 10 to 20 percent.
If you plan to get a Surety Bid Bond, make certain you understand what it may provide prior to deciding. It is not easy to apply for it, but if you know more about this, it will be a little bit easier to be accepted.
You can find more on Indiana Performance Bonds here.