What is a Bid Bond in Wisconsin?
A bid bond is one of the types of surety bonds, that guarantees that the bidder will accept the project 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 finish the job once the bidder is selected after winning the bid. The simple reason is that you need one in order to get the work. However, the bigger question is why are more owners/developers requiring a bid bond in the first place? The basic answer is risk. Given the uncertainty of the marketplace, which includes long-term contractors going bankrupt, 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 Wisconsin 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 Wisconsin?
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 performance bond if you win the contract. 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 WI?
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 Wisconsin. 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 Wisconsin?
We make it easy to get a contract bid bond. Just click here to get our Wisconsin Bid Bond Application. Fill it out and then email it and the Wisconsin 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 each application for surety bid bonds and then submit it to the surety that we believe will provide the best bid and performance bond for your company. We have a excellent success rate in getting our clients bid and P&P bonds at the best rates possible.
What is a Wisconsin Bid Bond?
A bid bond is a bond that provides assurance that you will accept the work if you win the contract. The bid fee (usually five (5%) or ten (10%) percent) is a fine 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 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 corporation that gets 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:
Fond Du Lac
See our Wyoming Bid Bond page here.
More on Bid Bonds https://swiftbonds.com/bid-bond/.
Inside Main Criteria When Thinking Of Bid Bonds
Surety Bid Bond is something extremely important for anybody, however it's a little bit 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 correctly for the obliged.
You must understand that most folks will expect you to get a specific bond before they think about your services because it would be a kind of guarantee for them. Since they want this from you, it is extremely important to search for an insurance company that can give this to you.
If you wish to get a license bond, permit bond, commercial bond and more, you must know more about Bid Bonds. Here are a few of the essential things that you have to know.
The Importance Of A Surety Bid Bond
Bid Bonds will always be required since they often protect the public. This is a type of assurance that the obligations and duties will probably be finished. You will have to get a license Surety Bid Bond to make certain that the company will always follow the laws and you could get a contract bond to ensure that the public project will be completed. A Surety Bid Bond is intended for the obliged because they are actually the ones that need protection, but it can also benefit you because the clients will trust you if you have this. There are thousands of bonds right now and the kind of bond that you are looking for will depend on your situation.
How Does It Work in Wisconsin?
Bid Bonds could be considered as a three-party agreement between a surety company, the principal and the obliged. The principal is actually known as the employer or company that could perform the work and the obliged is the project owner. If a construction company will work on a public project, they will likely be needed to get Bid Bonds. The government will be requiring a construction company to secure a host of bonds once they want to continue with the project.
The work of the bonds is for the subcontractors and workers to ensure that they will likely be paid even if the contractor will default. The contractor will cover the losses, but when they reached their limit, the duty will actually fall to the surety company.
The Application For A Surety Bid Bond
Bid Bonds are provided by insurance organizations, but you can look for standalone surety companies that will specialize in these products. It will not be simple to apply for a bond because the applicant will have to experience a rigid process that is quite similar to applying for a loan. The bond underwriters will obviously review the financial history of the applicant, their credit profile and other important aspects to guarantee that they will be approved. It also means that there's a chance that you will probably be denied for a Surety Bid Bond, especially when the underwriters found something negative on the credit history.
How Much Do You Must Spend?
You cannot 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 thousands of different bonds available right now and the cost will usually depend on the bond that you could get. The amount of bound that you could avail can also be a big factor because you can select a $10,000 bond or a $25,000 bond or higher.
In case you have a credit score of 700 and above or very near this number, you can definitely qualify for the standard bonding market and you only have to pay about 1 to 4 percent of the Surety Bid Bond amount. It indicates that if you may actually obtain a $10,000 bond, you only have to pay about $100 to $400.
Your Application Might Be Rejected
There is actually a chance that your license and permit bond request will likely be denied by the surety company because it will usually depend on the info that they can get from the background check. If the surety company believes that it will likely be a risk for them to provide a Surety Bid Bond to you, they will deny your application. Your credit history is one of the most important factors to be approved for a surety body because if you have a bad credit rating, it will likely be tough to obtain a Surety Bid Bond.
If you managed to get a Surety Bid Bond even with a bad credit history, you will probably pay an interest rate of 10 to 20 percent.
You must know that a Surety Bid Bond is really important for businesses, especially if 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.