What is a Bid Bond in Kansas?
A bid bond is one of the types of surety bonds, that guarantees that the bidder will enter into the agreement 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 winning the bid. The simple reason is that you need one to get the contract. However, the larger question is why are more owners/developers requiring a surety bid bond? The simply explanation 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 finish the work. Thus, 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 5% or 10%, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Kansas?
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 get the job. 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 KS?
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 Kansas. 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 Kansas?
We make it easy to get a contract bid bond. Just click here to get our Kansas Bid Bond Application. Fill it out and then email it and the Kansas bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at 913-225-8501. We will review each and every application for bid and performance bonds and then submit it to the surety that we believe will provide the best bid and performance bond for your job. We have a great success rate in getting our clients surety bid bonds at the very best rates possible.
What is a Kansas 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 forfeiture 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. 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). 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 Kentucky Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Step-By-Step Quick Suggestions When Thinking Of Bid Bonds
Surety Bid Bond is extremely important for anyone, but this is quite complex if you do not know anything in regards to this. This is not an insurance claim, but this is a type of guarantee that the principal will do the work appropriately for the obliged.
You must know that most folks would require you to obtain a certain bond before they go for your services because this will be a kind of guarantee to them. Because they want this from you, it is very important to look for an insurance company that may give this to you.
If you'd like to get a license bond, permit bond, commercial bond and more, you have to know more about Bid Bonds. Listed here are the things that you must know.
A Basic Explanation On Bid Bonds
Bid Bonds will invariably be required by the public because it will secure them and it will guarantee that the principal will fulfill their obligations. You are the principal so you have to get a license Surety Bid Bond to guarantee that your company will usually adhere to the laws and you should get a contract bond to guarantee that a public construction project will likely be accomplished. There are examples that will provide an idea on Surety Bid Bond.
This is actually made for the clients since they will be protected by the bond, but it can offer benefits to you as well since they would trust you if you have this.
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 will invariably be required by the law to buy Bid Bonds if they are taking a public project. As soon as the government requires a construction company to do something, the winning contractor should obtain a host of bonds.
The bond will make sure that the sub-contractors and the other workers will likely be paid even if the contractor defaults. The contractor will likely be accountable in addressing any losses, but as soon as they already reached their limit, the duty will fall to the surety company.
The Application For A Surety Bid Bond
Bid Bonds are offered by insurance businesses, but you may search for standalone surety companies that may concentrate on these products. It will not be simple to apply for a bond because the applicant will need to experience a strict process that is comparable to applying for a loan. The bond underwriters will absolutely evaluate the financial history of the applicant, their credit profile and other key factors to guarantee that they will be approved. It also implies that you have a chance of being denied for a Surety Bid Bond, specifically when the underwriters saw something bad on your credit history.
How Much Are You Going To Spend For This?
There isn't any fixed cost if you are talking about a Surety Bid Bond as it will still depend upon different 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 virtually thousands of bonds available today and the cost will always depend on the type that you will get. It won't be a problem for the amount of bond because you will get a $10,000 bond or a $25,000 bond. If your credit rating is above or near 700, you will obviously qualify for the standard bonding market and you only have to pay about 1 to 4 percent of the Surety Bid Bond amount. If you will get a $10,000 bond, it will only cost $100 to $400.
The Possibility Of Being Declined
There is a chance that your license and permit bond request will actually be refused by the insurance businesses and it will usually depend upon their background check. As soon as they think that providing a bond to you will be a big risk, they won't release a Surety Bid Bond for you.
Credit history is also an issue because if you have a bad credit rating, it would be very difficult for you to get a Surety Bid Bond as the businesses consider you as a risk. In case you have a poor credit rating, you can be accepted for the bond, but you must pay an interest rate of 10 to 20 percent.
There's a possibility that your application would be declined so you need to look into the requirements before applying.
If you are going to get your Surety Bid Bond, make sure that you understand the whole process so you won't make a mistake. It will not be easy to apply, but if your requirements are complete and you are eligible, you could obtain a Surety Bid Bond.