What is a Bid Bond in North Carolina?
A bid bond is a type of surety bond, which guarantees that the bidder will enter into the agreement 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 bid. The basic reason is that you need one in order to get the job. However, the larger question is why are more owners/developers requiring a surety bid bond? The basic answer is risk. Given the uncertainty of the marketplace, which includes long-term contractors going out of business, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable finish the job. So, they require a some protection.
Just fill out our bond application here and email it to [email protected] – click here to get our North Carolina 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 North Carolina?
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 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 NC?
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 North Carolina. 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 North Carolina?
We make it easy to get a contract bid bond. Just click here to get our North Carolina Bid Bond Application. Fill it out and then email it and the North Carolina 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 all application for bid and P&P bonds and then submit it to the surety that we believe will provide the best surety bond for your job. We have a high success rate in getting our clients bid and performance bonds at the best rates possible.
What is a North Carolina 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 penalty 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 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 gets 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, performance and payment bonds in each of the following counties:
See our North Dakota Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Immediate Suggestions When Looking At Bid Bonds
Bid Bonds could be quite complicated to know, specially if you don’t understand how it actually works. Most folks are considering this as an insurance, but this is a kind of guarantee that the principal will do their work properly. Although insurance companies usually provide a Surety Bid Bond, you cannot really call it insurance because it has a different function. Most individuals will definitely anticipate you to get a Surety Bid Bond before they consider your services as it is a kind of guarantee to them.
If you wish to consider a license bond, permit bond, commercial bond and more, you must know how they work. We will provide some info on the importance of Bid Bonds and how they work.
What Is A Surety Bid Bond?
Bid Bonds are developed to protect the public as they are a form of guarantee that the obligation will likely be achieved. You must get a license Surety Bid Bond to guarantee that your company will stick to the laws and you obtain a contract bond to guarantee that a public construction project will likely be finished.
These are the examples that are often used to describe what Bid Bonds are and how they work. It would benefit you in a way that the consumers will trust you if you have a company since they’re protected by the bond.
There are literally thousands of bonds today and the type of bond that you actually need will usually depend upon your situation.
The Main Work Of A Surety Bid Bond in North Carolina
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 are 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 assurance that the sub-contractors and the other workers can be paid even if the contractor will default. The contractor will be covering the losses, but when they already reached their limit, the duty will fall to the surety company.
How To Apply For A Surety Bid Bond
Bid Bonds are typically provided by insurance businesses, but you may search for some separate surety businesses that specialize in these unique products. Surety companies are licensed by a state Department of Insurance.
Applying for a bond is not as easy as you imagine as the applicants will experience a procedure much like a loan approval. The bond underwriters will review the financial history of a candidate, credit profile, managerial team and other important aspects.
It only means that there is still a chance that you’ll not be accepted for a Surety Bid Bond, specifically when the bond underwriters actually saw something negative.
How Much Are You Going To Spend?
There isn’t any set cost for a Surety Bid Bond since it depends upon various reasons like bond type, bond amount, where the bond will likely be issued, contractual risk, the credit rating of the applicant and a lot more.
There are plenty of bonds available right now and the cost will invariably depend on the type of bond that you will get. The amount of bond that you’ll get can also be an issue because you could obtain a $10,000 bond or a $25,000 bond.
In case you have a credit rating of above or near 700, you will certainly qualify for the standard bonding market and you just need to pay a premium that is 1 to 4 percent of the Surety Bid Bond amount. If you’ll get a $10,000, it will cost around $100 to $400.
The Possibility Of Being Rejected in NC
There’s a chance that your license and permit bond request will be declined by the insurance businesses and it will depend on their background check. If they actually feel that giving you a bond will likely be a big risk, they won’t release a Surety Bid Bond for you.
Credit score is also a big factor since in case you have a bad credit score, it will be hard 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 score, you could be approved for the bond, but you should pay an interest rate of 10 to 20 percent.
There is a possibility that your application will be refused so you must look into the requirements before applying.
If you’re going to get a Surety Bid Bond, you have to be sure that you what it could provide. It will not be easy to apply for one, but if you actually know more concerning this, it will be easier to be accepted.