What is a Bid Bond in Kentucky?
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. It provides assurance to the project owner that the bidder has the expertise and capability to complete the job once the bidder is selected after winning the bidding process. The basic reason is that you need one in order to get the work. But the bigger 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 experienced contractors closing shop, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable to complete the job. Accordingly, they require a some protection.
Just fill out our bond application here and email it to [email protected] - click here to get our Kentucky 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 or ten percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Kentucky?
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 P&P bond if you get the job. The cost of a P&P 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 KY?
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 Kentucky. 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 Kentucky?
We make it easy to get a contract bid bond. Just click here to get our Kentucky Bid Bond Application. Fill it out and then email it and the Kentucky 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 and every application for surety bid bonds and then submit it to the surety that we believe will provide the best bid and P&P bond for your company. We have a high success rate in getting our clients surety bid bonds at the best rates possible.
What is a Kentucky 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 decide not to take 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 performance security for the owner of the project.
Who Gets the Bond?
The general contractor is the corporation 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 performance and payment bond is written by the surety. This is also known as bonding a business.
We provide bid, performance and payment bonds in each of the following counties:
See our Louisiana Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Realistic Suggestions When Thinking Of Bid Bonds
You need to know that a Surety Bid Bond is really important for anyone, but this is complicated if you don't know anything about it. This isn't a type of insurance claim since this is a kind of assurance that the principal will perform the work adequately for the obliged. You have to understand that some individuals require you to get a bond before they will think about your services since it might be considered as a form of guarantee to them. They require this kind of thing from you so you should look for an insurance company which will offer this to you. If you wish to search for a license bond, permit bond, commercial bond and more, you have to understand what this signifies.
The Importance Of A Surety Bid Bond
Bid Bonds will almost always be required since they often protect the public. This is a form of guarantee that the obligations and duties will probably be finished. You will have to obtain a license Surety Bid Bond to be sure that the company will always stick to the laws and you may get a contract bond to make sure that the public project will be completed. A Surety Bid Bond is meant for the obliged as they are actually the ones that need protection, but it can also benefit you as the clients will trust you if you have this. There are plenty of bonds today and the kind of bond that you would like to think about will depend upon the situation.
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 in fact the project owner and the principal is the employer or company that will perform the work. Construction organizations are usually required by the law to get Bid Bonds as soon as they are 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 particular project. The bond will guarantee that the subcontractors and the other workers could be paid even if the contractor will default. The contractor will probably be covering the losses, but when they already reached their limit, the duty will fall to the surety company.
Applying For A Surety Bid Bond
Insurance providers typically offer Bid Bonds, but there are some standalone surety businesses that specialize in these products. Surety businesses will always be licensed by a state Department of Insurance so make sure that you check first before you avail. It will not be simple to apply for a bond as the applicants will need to proceed through a background checking procedure. The bond underwriters will evaluate the financial history of the applicants, credit profile and other important aspects.
It implies that there's a chance that you won't be approved for a Surety Bid Bond, specially if you have a bad credit rating.
How Much Are You Going To Spend For This?
There isn't any fixed cost when you're talking about a Surety Bid Bond because it will still depend on different reasons like the bond type, bond amount, where the bond will be issued, contractual risk, credit score of the applicant and more. There are actually thousands of bonds available today and the cost will always depend upon the type that you will get. The amount of bond is not really an issue because you may obtain a $10,000 bond or a $25,000 bond. If you actually have a credit score that is above or near 700, you will qualify for the standard bonding market and you need to pay about 1 to 4 percent of the Surety Bid Bond amount. If you could get $10,000 bond, it will only cost $100 to $400.
Is There A Chance To Be Denied?
There is a possibility that your license and permit bond request will be declined by the insurance providers and it'll depend upon their background check. If they think that providing a bond to you will likely be a big risk, they won't release a Surety Bid Bond for you.
Credit history is also a big factor since if you have a bad credit rating, it will be tough for you to get a Surety Bid Bond since the businesses are thinking of you as a risk. In case you have a poor credit history, you can be accepted for the bond, but you must pay an interest rate of 10 to 20 percent.
There is a possibility that your application will be refused so you have to look at the requirements before you apply.
You should understand that a Surety Bid Bond is very important for businesses, specially once they will likely be doing a government project. Bid Bonds will likely be used for many things, but they have one thing in common - they will invariably secure the obliged.