What is a Bid Bond in Virginia?
A bid bond is a type of surety bond, which guarantees that the bidder will take the job and complete the agreement according to its terms. It provides assurance to the project owner that the bidder has the knowhow and ability to finish the job once the bidder is selected after winning the bidding process. The simple reason is that you need one so that you get the work. But the larger question is why are more owners/developers requiring a bid bond? The simply explanation is risk. Given the uncertainty of the marketplace, which includes experienced contractors closing their doors, 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 Virginia 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 Virginia?
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 surety performance 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 WV?
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 Virginia. 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 Virginia?
We make it easy to get a contract bid bond. Just click here to get our Virginia Bid Bond Application. Fill it out and then email it and the Virginia 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 and performance bond for your contract. We have a very high success rate in getting our clients surety bid bonds at the best rates possible.
What is a Virginia 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 decide not to take the work.
Find a Bid Bond near Me
Typically, a bid bond and P&P 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 obtains 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 performance and payment bonds in each of the following counties:
See our Wisconsin Bid Bond page here.
More on Surety Bid Bonds https://swiftbonds.com/bid-bond/.
Clear-Cut Recommendations When Thinking Of Bid Bonds Solved
It's correct that Bid Bonds are quite complicated, particularly if you don't have any idea how this works. Most people are thinking about this as an insurance, but this is a form of guarantee that the principal will perform their work correctly. Insurance providers usually offer a Surety Bid Bond, but you cannot call it insurance because its function is different. Most individuals will absolutely expect you to get a Surety Bid Bond before they think about your services as it is a type of guarantee to them.
If you wish to obtain a license bond, permit bond, commercial bond and more, you have to understand how they work. We are going to offer you info on the significance of Bid Bonds and how they actually work.
A Basic Explanation On Bid Bonds
Bid Bonds will actually be required by the public since it may secure them and it will guarantee that the principal would fulfill their duties. As the principal, you have to obtain a license Surety Bid Bond to guarantee that your company will adhere to the laws and you need a contract bond to ensure that a public construction project will likely be completed. These are just a few examples which will give you an idea about Bid Bonds.
This is actually made for the customers since they're protected by the bond, but it would benefit you as well because they will trust you if you have a Surety Bid Bond.
The Primary Work Of A Surety Bid Bond in WV
Bid Bonds are a three-party agreement between the principal, the obliged and the surety company. The obliged is the project owner while the principal is in fact the employer or company that would perform the work. Construction businesses will almost always be required by the law to get Bid Bonds if they're chosen for a public project. The government will probably be requiring a construction company to get a host of bonds before they actually work on a specific project. The bond will guarantee that the sub-contractors and the other workers will probably 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.
How Do You Apply For A Surety Bid Bond in West Virginia?
Bid Bonds are provided by insurance businesses, but you could have some standalone surety companies that concentrate on these products. Surety businesses are licensed by a state Department of Insurance.
It is not easy to apply for a bond since the candidates will really experience a process that's comparable to applying a loan. The bond underwriters will evaluate the financial history of a candidate, credit profile, managerial team and other key factors.
It only means that there's still a possibility that you'll not be accepted for a Surety Bid Bond, particularly when the bond underwriters actually saw something negative.
How Much Are You Going To Spend For This?
There's no fixed cost when you're talking about a Surety Bid Bond since it will still depend upon different reasons like the bond type, bond amount, where the bond will probably be issued, contractual risk, credit rating of the applicant and more. There are plenty of bonds available right now and the cost will still depend on the type that you'll get. The amount of bond will probably be an issue because you may always obtain a $10,000 bond or a $25,000 bond. If you actually have a credit rating that is above or near 700, you will qualify for the standard bonding market and you should pay about 1 to 4 percent of the Surety Bid Bond amount. If you may get $10,000 bond, it will only cost $100 to $400.
Rejection and Your Application
There's actually a chance that your license and permit bond request will likely be refused by the surety company because it will invariably depend on the information that they can get from the background check. If the surety company thinks that it would be a risk for them to offer you a Surety Bid Bond, they will deny your application. You credit history will truly be an important factor if you want to be approved for a Surety Bid Bond because if your credit history is bad, it will be hard to be approved.
If you can get a Surety Bid Bond even in case you have a bad credit rating, you will surely pay an interest rate of 10 to 20 percent.
You'll understand that a Surety Bid Bond is vitally important for businesses, specially as soon as they will likely be doing a government project. Bid Bonds will definitely be used for plenty of things, but they have one thing in common - they always secure the obliged.