What is a Bid Bond in New Jersey?
A bid bond is a type of surety bond, which 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 ability to finish the job once you are selected after the bidding process. The simple 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 simply explanation is risk. Given the uncertainty of the marketplace, which includes long-term contractors going bankrupt, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable complete the work. So, they require a some protection.
Just fill out our bond application here and email it to [email protected] – click here to get our New Jersey 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 New Jersey?
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 performance bond if you get the job. The cost of a surety 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 NJ?
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 New Jersey. 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 New Jersey?
We make it easy to get a contract bid bond. Just click here to get our New Jersey Bid Bond Application. Fill it out and then email it and the New Jersey bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at 913-225-8501. We thoroughly review each and every application for surety 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 very high success rate in getting our clients bid bonds at the best rates possible.
What is a New Jersey 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 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. This is performance security for the owner of the project.
Who Gets the Bond?
The general contractor is the company that obtains the bond. It is for the benefit of the owner (or in the case of goverNJent contract work, the goverNJental 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 in each of the following counties:
See our New Mexico Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Introducing Trouble-Free Suggestions When Looking At Bid Bonds
Surety Bid Bond is very important for anyone, but this is complex if you don’t have any idea concerning this. Generally, this is not an insurance claim, but it’s a form of guarantee that you, as the principal, will perform the work effectively for the obliged.
You have to understand that most folks will anticipate you to get a specific bond before they consider your services because it will be a kind of guarantee for them. As they want this from you, it’s extremely important to look for an insurance company that will give this to you.
If you wish to get a license bond, permit bond, commercial bond and more, you need to know more about Bid Bonds. Here are some of the things that you have to know.
A Basic Explanation On Bid Bonds in New Jersey
Bid Bonds will be required by the public since it can secure them and it can also guarantee that the principal will fulfill their duties. As the principal, you must get a license Surety Bid Bond to guarantee that your company will stick to the laws and you need a contract bond to make sure that a public construction project will be completed. There are examples that will provide an idea on Surety Bid Bond.
This is actually made for the customers because they’re protected by the bond, but it will benefit you as well as they will trust you if you have a Surety Bid Bond.
The Main 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 the project owner while the principal is actually the employer or company that will perform the work. Construction businesses will almost always be required by the law to get Bid Bonds if they’re chosen for a public project. The goverNJent will actually demand a construction company to help secure a host of bonds before they work on a specific project. The bond will guarantee that the subcontractors and the other workers can be paid even if the contractor will default. The contractor will probably be covering the losses, but when they reached their limit, the duty would fall to the surety company.
The Application For A Surety Bid Bond in NJ
Bid Bonds are offered by insurance businesses, but you may seek out standalone surety organizations which will specialize in these products. It will not be simple to apply for a bond as the applicant will need to experience a strict process that is comparable to applying for a loan. The bond underwriters will surely assess the financial history of the applicant, their credit profile and other key factors to guarantee that they will probably be approved. It also means 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?
You can anticipate that a Surety Bid Bond will not have a fixed cost because 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 plenty of bonds available right now and the cost will invariably depend on the type of bond that you’ll get. The amount of bond that you are going to is also an issue because you can get a $10,000 bond or a $25,000 bond.
If you have a credit score of above or near 700, you will truly be eligible for the standard bonding market and you only need to pay a premium that’s 1 to 4 percent of the Surety Bid Bond amount. If you will actually get a $10,000 bond, it will surely cost around $100 to $400.
Is There A Chance Of Being Denied?
There is a chance that your license and permit bond will be denied by the insurance organizations and it would depend upon the background check that they did. If they think that it’ll be a big risk to offer you a Surety Bid Bond, they will certainly deny your application. Credit history will be a deciding factor as well because if you will have a bad credit history, it will likely be difficult to obtain a Surety Bid Bond because organizations will think of you as a risk. For those who have a bad credit history, you will still be approved, but you should pay an interest rate of 10 to 20 percent.
If you genuinely wish to get your Surety Bid Bond, you need to make sure that you will understand the process so you won’t make a mistake. It won’t be simple to apply, but if your requirements are complete and you are eligible, you may get a Surety Bid Bond.