What is a Bid Bond in South Carolina?
A bid bond is a type of surety bond, which guarantees that the bidder will accept the project and complete the agreement according to its terms. It provides assurance to the project owner that the bidder has the ability and capability 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 work. But the bigger question is why are more owners/developers requiring a bid bond in the first place? The simply explanation is risk. Given the uncertainty of the marketplace, which includes long-term contractors closing shop, to municipalities filing bankruptcy (or just slow paying), has led to owners being afraid that their contractors will be unable to 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 South 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 South 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 surety performance bond if you get the job. The cost of a P&P 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 SC?
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 South 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 South Carolina?
We make it easy to get a contract bid bond. Just click here to get our South Carolina Bid Bond Application. Fill it out and then email it and the South 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 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 bonds at the very best rates possible.
What is a South Carolina 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 (5%) or ten (10%) percent) is a penalty 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 entity 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:
Hilton Head Island
See our South Dakota Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Step-By-Step Useful Guidelines When Looking At Bid Bonds
You need to understand that a Surety Bid Bond is critical for anybody, but this is complicated if you do not know anything about it. This isn't an insurance claim because this is a type of guarantee that the principal will effectively do their job. You have to understand that some people will require you to obtain a specific bond before they actually opt for your services since it will be a type of guarantee to them. Because they need this kind of thing from you, it's going to be very important to search for an insurance company that may offer this to you. If you actually want to consider a license bond, permit bond, commercial bond and more, you have to know what it means.
The Importance Of A Surety Bid Bond
Bid Bonds will always be necessary to protect the public because it is a type of guarantee that your obligations and duties will probably be complete. You have to get a license Surety Bid Bond to be sure that your company will adhere to the laws and you typically get a contract bond to guarantee that a public project will be completed. Typically, a Surety Bid Bond is intended for the obliged as they are the ones which are being protected, but it would benefit you as well as the clients will trust you in case you have this. There are plenty of bonds today and the type of bond that you want to think about will depend on the situation.
How Does It Work?
Bid Bonds can already be regarded as a three-party agreement between the principal, the surety company and the obliged. The principal is known as the employer or company which will carry out the work and the obliged is the project owner. Construction businesses will invariably be needed to purchase Bid Bonds if they will work on a public project. The government will also require the construction company to secure a host of bonds if they truly want to go with the project.
The main function of the bond is actually for the sub-contractors and employees to be sure that they will be paid even if the contractor defaults. The contractor will likely be addressing the losses, but once they reached the limit, the duty will absolutely fall to the surety company.
Applying For A Surety Bid Bond
Insurance providers frequently provide Bid Bonds, but there are some standalone surety businesses that specialize in these products. Surety businesses will invariably be licensed by a state Department of Insurance so ensure that you check first before you avail. It will not be easy to apply for a bond as the applications will have to proceed through checking before it is approved. The bond underwriters will have to look at the financial history of the applicants, credit profile and other important aspects.
It implies that there's a chance that you will not be accepted for a Surety Bid Bond, especially if you have a bad credit rating.
How Much Is A Surety Bid Bond?
You can't really find an exact price for a Surety Bid Bond because its cost is always impacted by numerous factors like bond type, bond amount, where it will likely be issued, contractual risk, credit rating of the applicant and more. There are absolutely thousands of different bonds available right now and the cost will depend upon the bond that you want to acquire. The amount of the bond will be a factor because you may always select a $10,000 bond or a $25,000 bond or higher.
If you already have a credit score of 700 and above or very near this number, you can be eligible for the standard bonding market and you only need to pay 1 to 4 percent of the Surety Bid Bond amount. This means that if you may actually get a $10,000 bond, you only have to pay about $100 to $400.
Is There A Chance To Be Refused?
There is a possibility that your license and permit bond request will likely be refused by the insurance providers and it'll depend upon their background check. If they actually believe that giving you a bond will be a big risk, they will not release a Surety Bid Bond for you.
Credit history may also be an issue because if you have a bad credit score, it will be hard for you to obtain a Surety Bid Bond since the companies feel that you are a risk. In case you have a bad credit rating, 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 check the requirements before applying.
If you actually want to get your Surety Bid Bond, you'll need to ensure that you will understand the process so you won't make a mistake. It won't be easy to apply, but if your requirements are complete and you are eligible, you could get a Surety Bid Bond.