What is a Bid Bond in Nevada?
A bid bond is one of the types of surety bonds, which guarantees that the bidder will accept the project and complete the agreement according to its terms. The bid bond provides assurance to the project owner that the bidder has the knowhow and ability to finish the job once the bidder is selected after winning the bid. The simple reason is that you need one so that you get the contract. 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 shop, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable finish the job. Accordingly, 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 or ten percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Nevada?
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 surety 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 NV?
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 Nevada. 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 Nevada?
We make it easy to get a contract bid bond. Just click here to get our Nevada Bid Bond Application. Fill it out and then email it and the Nevada 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 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 very high success rate in getting our clients surety bid bonds at the very best rates possible.
What is a Nevada 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 penalty 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 P&P 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 corporation that obtains the bond. It is for the benefit of the owner (or in the case of government contract work, the governmental entity). However, 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, performance and payment bonds in each of the following counties:
North Las Vegas
See our New Hampshire Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Introducing The Strategies When Looking At Bid Bonds
Surety Bid Bond is extremely important for anyone, but this is complex if you do not have any idea about this. This isn't 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 individuals would require you to get a particular bond before they select your services because this will be a form of guarantee to them. Since they want this from you, it's extremely important to search for an insurance company which will give this to you.
If you wish to obtain a license bond, permit bond, commercial bond and more, you must understand what Surety Bid Bond means. Listed here are the things that you must know.
A Simple Explanation On A Surety Bid Bond
Bid Bonds will actually be required by the public since it can secure them and it will guarantee that the principal would fulfill their duties. You are the principal so you have to obtain 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 be finished. These are only a few examples which will offer you an idea about Bid Bonds.
This is actually made for the customers since they are protected by the bond, but it would benefit you as well because they will trust you in case you have a Surety Bid Bond.
How Does It Work?
Bid Bonds are actually considered as a three-party agreement among 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 are asked for by the law to get Bid Bonds once they are selected for a public project. If the government needs to do a public project, the winning contractor must secure a host of bonds.
The bond will guarantee that the subcontractors and other workers would be paid even if the contractor defaults. The contractor would be responsible in addressing the losses, but once they reached the limit, the duty will fall to the surety company.The contractor will cover the losses, but once they actually reached the limit, the duty will really fall to the surety company.
The Application For A Surety Bid Bond
Bid Bonds are frequently offered by insurance organizations, but you may always seek out standalone surety companies that would specialize in these unique products. It will not be simple to apply for a bond since the applicant will need to experience a strict process that is comparable to applying for a loan. The bond underwriters will still evaluate the financial history of the applicant, their credit profile and other important aspects to be sure that they should be approved. It also signifies that you have a chance of being denied for a Surety Bid Bond, specially when the underwriters saw something bad on your credit history.
The Price Of A Surety Bid Bond
You can anticipate that a Surety Bid Bond will not have a fixed cost since it will depend on different reasons such as bond type, bond amount, where the bond will likely be issued, contractual risk, the credit history of the applicant and many more.
There are thousands of bonds available today and the cost will depend on the type of bond that you want to obtain. The amount of bond that you will get will also be an issue because you could get a $10,000 bond or a $25,000 bond.
In case you have a credit history of above or near 700, you are going to be eligible for the standard bonding market and you are going to only pay a premium that's 1 to 4 percent of the Surety Bid Bond amount. If you could get a $10,000 bond, it'll cost around $100 to $400.
Your Application Could Be Refused
There's a big chance that your license and permit bond request will be refused by the surety company since it will usually depend on the results that they will get from the background check. If the surety company thinks that it will likely be a risk to offer you a Surety Bid Bond, they will really deny your application. Your credit score is one of the most important factors to be approved for a surety body because if you have a bad credit history, it will be hard to get a Surety Bid Bond.
If you managed to get a Surety Bid Bond even with a bad credit rating, you will probably pay an interest rate of 10 to 20 percent.
If you are going to get a Surety Bid Bond, you have to be sure that you what it can provide. It's not easy to apply for it, but if you know more about this, it will be a little bit easier to be accepted.