What is a Bid Bond in New York?
A bid bond is a type of surety bond, that guarantees that the bidder will accept the project and complete the contract according to its terms. The bid bond provides assurance to the project owner that the bidder has the ability and wherewithal to complete the job once you are selected after winning the bidding process. The simple reason is that you need one so that you get the job. However, the larger question is why are more owners/developers requiring a surety bid bond? The answer 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 to complete the job. Thus, they require a some protection.
Just fill out our bond application here and email it to [email protected] - click here to get our New York 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 New York?
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 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 NY?
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 York. 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 York?
We make it easy to get a contract bid bond. Just click here to get our New York Bid Bond Application. Fill it out and then email it and the New York bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at 913-225-8501. We review all application for bid bonds and then submit it to the surety that we believe will provide the best surety bid bond for your contract. We have a great success rate in getting our clients surety bid bonds at the best rates possible.
What is a New York 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 five or ten percent) is a fine that is paid when you win the bid, but then back out of doing 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 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:
New York City
See our North Carolina Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Clear-Cut Advice When Looking At Bid Bonds Described
Bid Bonds are quite complicated to understand, specifically if you don't understand how it really works. Most individuals consider this as insurance, but it's actually a type of guarantee that the principal will perform their work properly for the obliged. Insurance providers usually provide a Surety Bid Bond, but you cannot call it insurance because its function is different. Most individuals will definitely expect you to get a Surety Bid Bond before they think about your services as it's a form of guarantee to them.
If you want to get a license bond, permit bond, commercial bond and more, you have to know how they work. We will offer you information on the importance of Bid Bonds and how they actually work.
An Explanation On Bid Bonds in NY
Bid Bonds will always be required by the public because it will secure them and it'll guarantee that the principal will fulfill their commitments. You are the principal so you have to get a license Surety Bid Bond to guarantee that your company will invariably abide by the laws and you must get a contract bond to guarantee that a public construction project will likely be completed. There are examples that will provide an idea on Surety Bid Bond.
This is actually made for the consumers as 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.
The Work Of A Surety Bid Bond
Bid Bonds are often known 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 would carry out the work. Construction companies will probably be asked by the law to get Bid Bonds when they're hired for a public project. The government will actually demand a construction company to help secure a host of bonds before they work on a particular project. The bond will guarantee that the subcontractors and the other workers would 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.
The Application For A Surety Bid Bond in New York
Bid Bonds are offered by insurance companies, but you may search for standalone surety organizations that may specialize in these products. It won't be simple to apply for a bond as the applicant will have to experience a rigid procedure that is quite comparable to applying for a loan. The bond underwriters will review the financial history of the applicant, their credit profile and other key factors to make sure that they deserve to be approved. It also implies that there's a chance that you will be denied for a Surety Bid Bond, specially when the underwriters found something negative on the credit history.
How Much Are You Going To Spend?
You could expect that a Surety Bid Bond won't have a fixed cost as it will depend on different reasons such as bond type, bond amount, where the bond will be issued, contractual risk, the credit rating of the applicant and many more.
There are tons of bonds available right now and the cost will invariably depend upon the kind of bond that you'll get. The amount of the bond will also be an issue because you may obtain a $10,000 bond or a $25,000 bond.
In case you have a credit score of above or near 700, you'll be eligible for the standard bonding market and you'll only pay a premium that's 1 to 4 percent of the Surety Bid Bond amount. If you are going to get a $10,000, it would cost around $100 to $400.
Your Application Can Be Refused in NY
There is actually a chance that your license and permit bond request will be denied by the surety company as it will usually depend on the info that they can 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 definitely deny your application. Your credit rating is one of the most important factors to be approved for a surety body because if you have a bad credit score, it will be difficult to get a Surety Bid Bond.
If you are going to get a Surety Bid Bond even if your credit rating is bad, you are going to pay an interest rate of 10 to 20 percent.
If you intend to get a Surety Bid Bond, just be sure you actually understand what it can provide. It won't be easy to apply for one, but if you actually know more about this, it will be easier to be accepted.