What is a Bid Bond in Oregon?
A bid bond is a type of surety bond, that guarantees that the bidder will take the job and complete the contract according to its terms. The bid bond provides assurance to the project owner that the bidder has the ability and ability to complete the job once the bidder is selected after winning the bidding process. The basic reason is that you need one to get the contract. But the bigger question is why are more owners/developers requiring a bid bond? The simple answer is risk. Given the uncertainty of the marketplace, which includes experienced 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 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 (5%) or ten (10%) percent, is forfeited if you don’t accept the job).
How much does a Bid Bond Cost in Oregon?
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 surety 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 OR?
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 Oregon. 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 Oregon?
We make it easy to get a contract bid bond. Just click here to get our Oregon Bid Bond Application. Fill it out and then email it and the Oregon 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 all application for bid and performance bonds and then submit it to the surety that we believe will provide the best surety bond for your company. We have a excellent success rate in getting our clients bid bonds at the best rates possible.
What is a Oregon 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 (5%) or ten (10%) percent) is a forfeiture that is paid when you win the bid, but then refuse 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. The bond is performance security for the benefit of the owner.
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 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 Pennsylvania Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Comparing Standard Details On The Good Reasons To Look For Bid Bonds
Surety Bid Bond is something extremely important for anybody, but it is a little complicated if you do not know anything about this. This is not an insurance claim, but this is a form of guarantee that the principal will perform the work appropriately for the obliged.
You must know that most people will need you to get a certain bond before they opt for your services as this will be a kind of guarantee to them. As they want this from you, it is vitally important to look for an insurance company which will give this to you.
If you truly want a license bond, permit bond, commercial bond and more, you must know many things about Bid Bonds. Listed below are some of the significant things that you must know.
What Exactly Is A Surety Bid Bond?
Bid Bonds are designed to secure the public since they're a form of guarantee that the obligation will be achieved. You should get a license Surety Bid Bond to guarantee that your company will abide by the laws and you obtain a contract bond to guarantee that a public construction project will be accomplished.
These are the examples that are frequently used to describe what Bid Bonds are and how they work. It'll also benefit you as the consumers will place their trust in you if they will be protected by bond.
There are literally thousands of bonds right now and the kind of bond that you actually need will usually depend upon your situation.
How Does It Work?
Bid Bonds are regarded as a three-party agreement between a surety company, the obliged and the principal. The principal is actually known as the employer or company that can perform the work and the obliged is the project owner. Construction companies are generally needed to purchase Bid Bonds as soon as they are considering a public project. If they want to work on the project, the government will need the construction company to secure a host of bonds.
The work of the bonds is aimed at the subcontractors and workers to guarantee that they will be paid even if the contractor defaults. The contractor will likely be addressing the losses, but as soon as they reached the limit, the duty will really fall to the surety company.
Applying For A Surety Bid Bond
Insurance providers usually offer Bid Bonds, but there are standalone surety businesses that usually specialize in these unique products. Surety businesses will definitely be licensed by a state Department of Insurance so you should check it first before you avail. It will not be simple to apply for a bond because the applicants will need to go through a background checking procedure. The bond underwriters will need to check the financial history of the candidates, credit profile and other important aspects.
It only means that there is always a chance that you'll not be approved for a Surety Bid Bond, specifically if your credit history is bad.
How Much Are You Going To Spend For This?
There's no fixed cost if you are referring to a Surety Bid Bond because it will still depend upon different reasons like the bond type, bond amount, where the bond will be issued, contractual risk, credit rating of the applicant and more. There are literally thousands of bonds available right now and the cost will always depend upon the type that you will get. 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 obtain a $10,000 bond, it will only cost $100 to $400.
Is There A Chance To Be Rejected?
There's a chance that your license and permit bond request will actually be declined by the insurance businesses and it will always depend upon their background check. As soon as they actually feel that giving you a bond will likely be a big risk, they will not release a Surety Bid Bond for you.
Credit history is also an issue because if you have a bad credit score, it will be very hard for you to get a Surety Bid Bond as the companies consider you as a risk. If you have a bad credit score, you can still be accepted for the bond, but you'll pay an interest rate of 10 to 20 percent.
There is a possibility that your application will be declined so you have to look at the requirements before you apply.
In case you are going to get a Surety Bid Bond, you should be sure that you what it could provide. It won't be a simple task to be accepted for this, but if you understand how it works, you'll also know in case you are qualified or not.