What is a Bid Bond in Rhode Island?
A bid bond is a type of surety bond, which guarantees that the bidder will accept the contract and complete it according to its terms. The bid bond provides assurance to the project owner that the bidder has the knowhow and ability to complete the job once the bidder is selected after winning the bid. The basic reason is that you need one in order to get the contract. However, the bigger question is why are more owners/developers requiring a bid bond in the first place? The simple answer is risk. Given the uncertainty of the marketplace, which includes long-time contractors closing their doors, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable finish 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 Rhode Island 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 Rhode Island?
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 RI?
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 Rhode Island. 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 Rhode Island?
We make it easy to get a contract bid bond. Just click here to get our Rhode Island Bid Bond Application. Fill it out and then email it and the Rhode Island bid specs/contract documents to [email protected] or fax to 855-433-4192.
You can also call us at 913-225-8501. We review each application for bid and performance bonds and then submit it to the surety that we believe will provide the best bid bond for your company. We have a high success rate in getting our clients surety bonds at the best rates possible.
What is a Rhode Island 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 or ten percent) 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. 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 bonds, performance and payment bonds in each of the following counties:
See our South Carolina Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Finding Where To Find Different Ideas When Looking At Bid Bonds
You should know that a Surety Bid Bond is extremely important for anybody, however it is complicated if you do not know anything about this. This is not regarded as an insurance claim as it is a kind of assurance that the principal will do their job effectively. You have to understand that some folks will require you to get a particular bond before they actually go for your services as it will probably be a type of guarantee to them. They require this kind of thing from you so you need to look for an insurance company that can offer this to you. If you'd like to think about a license bond, permit bond, commercial bond and more, you have to know what it means.
What Exactly Is A Surety Bid Bond?
Bid Bonds are designed to protect the public since they are a type of guarantee that the duty will be fulfilled. You should obtain a license Surety Bid Bond to guarantee that your company will abide by the laws and you get a contract bond to guarantee that a public construction project would be finished.
These are the examples that are often used to describe what Bid Bonds are and how they work. It will also benefit you because the clients will place their trust in you if they will likely be protected by bond.
There are thousands of bonds which exist today and the kind of bond that you'll require depends on your circumstance.
How Does a Bid Bond Work in RI?
Bid Bonds can be regarded as a three-party agreement between a surety company, the principal and the obliged. The principal is actually referred to as the employer or company that will perform the work and the obliged is the project owner. If a construction company will work on a public project, they will be necessary to get Bid Bonds. The government may also require the construction company to secure a host of bonds if they truly want to go with the project.
The work of the bonds is for the subcontractors and workers to ensure that they will be paid even if the contractor will default. The contractor will handle any losses, but as soon as they reached their limit, the duty will fall to the surety company.
The Application For A Surety Bid Bond
Bid Bonds are often offered by insurance organizations, but you can always search for standalone surety businesses that will specialize in these unique products. It will not be simple to apply for a bond because the applicant will have to experience a rigid procedure that is quite similar to applying for a loan. The bond underwriters will review the financial history of the applicant, their credit profile and other important aspects to make sure that they should be approved. It also implies that you have a chance of being denied for a Surety Bid Bond, specially when the underwriters saw something bad on your credit history.
How Much Are You Going To Spend For This?
There is no fixed cost when you are referring to a Surety Bid Bond since it will still depend on different reasons like the bond type, bond amount, where the bond will probably be issued, contractual risk, credit score of the applicant and more. There are thousands of bonds currently available and the cost will depend on the type that you plan to acquire. It will not be a problem for the amount of bond because you will get a $10,000 bond or a $25,000 bond. If you actually have a credit score that is above or near 700, you will qualify for the standard bonding market and you must pay about 1 to 4 percent of the Surety Bid Bond amount. If you will get a $10,000 bond, it will only cost $100 to $400.
Is There A Chance Of Being Denied?
There is a possibility that your license and permit bond will be denied by the insurance organizations and it will always depend upon the background check that they did. If they think that it will be a big risk to provide a Surety Bid Bond, they will deny your application. Credit rating will probably be a deciding factor as well because if you will have a bad credit rating, it will be difficult to obtain a Surety Bid Bond because businesses 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.
You must know that a Surety Bid Bond is really important for businesses, particularly as soon as they will consider a government project. Bid Bonds might be used for many things, but they all have one thing in common: they are all made to protect the obliged.