What is a Bid Bond in Mississippi?
A bid bond is one of the types of surety bonds, that guarantees that the bidder will take the job and complete the agreement according to its terms. The bid bond provides assurance to the project owner that the bidder has the expertise and ability to finish the job once the bidder is selected after winning the bidding process. The basic reason is that you need one to get the job. However, 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 long-time 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 Mississippi 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 Mississippi?
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 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 MS?
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 Mississippi. 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 Mississippi?
We make it easy to get a contract bid bond. Just click here to get our Mississippi Bid Bond Application. Fill it out and then email it and the Mississippi 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 bid and performance bonds and then submit it to the surety that we believe will provide the best surety bid bond for your job. We have a great success rate in getting our clients surety bonds at the very best rates possible.
What is a Mississippi 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 5% or 10%) is a damages calculation 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 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 entity 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, performance and payment bonds in each of the following counties:
See our Missouri Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Ideas When Thinking Of Bid Bonds Uncovered
It’s true that Bid Bonds are quite complicated, especially if you don’t have any idea how this works. Most folks are thinking of this as an insurance, but this is a kind of guarantee that the principal will do their work properly. Although insurance businesses usually provide a Surety Bid Bond, you can’t really call it insurance as it has a different function. Many folks will expect you to get a Surety Bid Bond as they go for your services since this is a type of guarantee to them.
If you’d like to get a license bond, permit bond, commercial bond and more, you have to know how they work. We’ll offer you info on the importance of Bid Bonds and how they actually work.
What Exactly Is A Surety Bid Bond?
Bid Bonds are always in demand to protect the public since they are a form of guarantee that obligations will be achieved. You need to get a license Surety Bid Bond to guarantee that your company will stick to the laws and you get a contract bond to guarantee that a public construction project will be completed.
These are some of the examples that are used to describe Bid Bonds and how they actually work. It will also benefit you as the clients will put their trust in you if they will likely be protected by bond.
There are literally thousands of bonds right now and the type of bond that you actually need will always depend on your circumstance.
How Does It Work?
Bid Bonds are actually regarded as a three-party agreement among a surety company, the principal and the obliged. The principal is the employer, individual or company that would carry out the work while the obliged is the project owner.
Construction companies would be required by the law to have their Bid Bonds when they are selected for a public project. Once the government requires a construction company to do something, the winning contractor should obtain several bonds.
The bond will guarantee that the sub-contractors and the other workers will be paid even if the contractor defaults. The contractor would be responsible in covering the losses, but once they reached the limit, the duty will fall to the surety company.The contractor will cover the losses, but as soon as they actually reached the limit, the duty will really fall to the surety company.
Applying For A Surety Bid Bond
Bid Bonds are often offered by insurance providers, but you’ll have some standalone surety businesses that would focus on these products. Surety companies are licensed by a state Department of Insurance.
It is hard to apply for a bond as the applicants will definitely experience a process that is comparable to applying a loan. The bond underwriters would evaluate the financial history of a candidate, credit profile and other key factors.
It only implies that there’s still a chance that you are going to not be approved for a Surety Bid Bond, specifically when the bond underwriters actually saw something negative.
How Much Are You Going To Spend For This?
There isn’t any fixed cost when you’re referring to a Surety Bid Bond since it will still depend on different reasons like the bond type, bond amount, where the bond will probably be issued, contractual risk, credit score of the applicant and more. There are thousands of bonds available today and the cost would depend on the type that you plan to acquire. The amount of bond is not really an issue because you may get a $10,000 bond or a $25,000 bond. If your credit history is above or near 700, you will certainly qualify for the standard bonding market and you only need 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.
Is There A Chance To Be Refused?
There’s a chance that your license and permit bond request will likely be denied by the insurance companies and it’ll depend on their background check. As soon as they feel that giving you a bond is a huge risk, they won’t release a Surety Bid Bond for you.
Credit history can also be a factor because in case you have a bad credit history, it will be difficult for you to obtain a Surety Bid Bond because the businesses feel that you are a risk. In case you have a bad credit history and you were approved for the bond, you usually have to pay an interest rate of 10 to 20 percent.
There’s a chance that your application would be refused so you must check the requirements before applying.
If you plan to obtain a Surety Bid Bond, make certain you understand what it may offer before deciding. It will not be a simple task to be accepted for this, but if you recognize how it works, you are going to also know in case you are qualified or not.