Or you Can download our Express Performance Bond Application (click to download form)
- Complete the form and email to [email protected]
- Be sure to include the Contract and Notice of Award letter (bid specs from the obligee).
- Send the bid results if you have them
What is a Performance Bond in Alabama?
How do I get a Performance and Payment Bond in Alabama?
We make it easy to get a contract performance bond. Just click here to get our Alabama Performance Application. Fill it out and then email it and the Alabama contract documents to [email protected] or fax to 855-433-4192.
You can also call us at (913) 562-6992. We thoroughly review each and every application for commercial bonds and then submit it to the surety that we believe will provide the best p & p bond for your estate. The surety broker will perform a credit check. We have a high success rate in getting our clients performance and payment bonds at the best rates possible.
Performance bond definition in AL?
Bond prices fluctuate based on the job size. 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 Alabama. Please call us today at (913) 562-6992. We'll find you the very best rate possible for your maintenance bond or completion bond.
| Bond Amount Needed | Fee |
| <$800,000 | 2-3% |
| >$800,000<$1,500,00 | 1.5-3% |
| >$1.500,000 | 1-3% |
These rates are for Merit clients, Standard rates are higher
Just fill out our bond application here and email it to [email protected]
Find a Performance Bond near Me
What is a Payment Bond? Is it included with the Performance Bond?
A payment bond is a bond that assures that the subcontractors and material vendors are paid. The payment provides that if the subcontractors are not paid timely and they make a valid claim, then the surety will pay them (and then collect and try from the general contractor).
What is a payment and performance bond? What is a contract bond?
Typically, a 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 entity 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.
How to Get a Performance Bond in AL
Just call us. We’ll work with you to get the best Alabama performance bond possible.
We provide performance and payment bonds in each of the following counties:
Autauga County
Baldwin County
Barbour County
Bibb County
Blount County
Bullock County
Butler County
Calhoun County
Chambers County
Cherokee County
Chilton County
Choctaw County
Clarke County
Clay County
Cleburne County
Coffee County
Colbert County
Conecuh County
Coosa County
Covington County
Crenshaw County
Cullman County
Dale County
Dallas County
DeKalb County
Elmore County
Escambia County
Etowah County
Fayette County
Franklin County
Geneva County
Greene County
Hale County
Henry County
Houston County
Jackson County
Jefferson County
Lamar County
Lauderdale County
Lawrence County
Lee County
Limestone County
Lowndes County
Macon County
Madison County
Marengo County
Marion County
Marshall County
Mobile County
Monroe County
Montgomery County
Morgan County
Perry County
Pickens County
Pike County
Randolph County
Russell County
St. Clair County
Shelby County
Sumter County
Talladega County
Tallapoosa County
Tuscaloosa County
Walker County
Washington County
Wilcox County
Winston County
Birmingham
Montgomery
Mobile
Huntsville
Tuscaloosa
Hoover
Dothan
Auburn
Decatur
See our Alaska performance bond page here.
Discover what do construction bonds cover for projects, ensuring financial security and completion, today!
See more at our Construction Performance Bond page.
A Deep Dive into Performance Bonds: Understanding Their Importance
Performance bonds play a crucial role in ensuring that contractors fulfill their obligations under a contract. These bonds provide a financial guarantee that work will be completed as agreed upon, protecting the interests of project owners. In this article, we’ll explore various aspects of performance bonds, including their differences from bank letters of credit, their refundability, and what happens when a claim is filed. We’ll also delve into the timing of bond releases, the concept of a 100 percent performance and payment bond, and the implications of bond expiration.
Contrasting Security: Performance Bonds vs. Bank Letters of Credit
In our experience, the distinction between performance bonds and bank letters of credit lies primarily in the nature of the financial guarantee provided. A performance bond is a surety bond issued by an insurance company or a bank, ensuring that a contractor completes the project as per the terms of the contract. On the other hand, a bank letter of credit is a financial instrument that guarantees payment up to a specified amount, regardless of the contractor's performance. We’ve consistently found that performance bonds offer more comprehensive protection for project owners, as they ensure the completion of the work, not just the payment.
The Refund Myth: Are Performance Bonds Non-Refundable?
We’ve come across situations where clients ask if performance bonds are refundable. Based on our experience, performance bonds are generally not refundable. The premium paid for a performance bond is a fee for the surety's risk in guaranteeing the contractor’s obligations. Even if the project is completed without any claims on the bond, the premium is considered earned by the surety company for taking on the potential risk.
Navigating Claims: Understanding the Claim Process for Performance Bonds
We’ve had firsthand experience with the process that unfolds when a claim is filed on a performance bond. If the contractor fails to fulfill their contractual obligations, the project owner can file a claim on the bond. The surety company will then investigate the claim to determine its validity. If the claim is valid, the surety may either pay the project owner the amount needed to complete the project or hire another contractor to finish the work. We’ve often noticed that this process protects project owners from financial losses due to contractor default.
The Release Process: When Do Performance Bonds Get Freed?
We’ve learned that the release of performance bonds typically occurs after the contractor has satisfactorily completed all contractual obligations. The project owner must formally acknowledge that the work has been completed to their satisfaction. We’ve consistently observed that some contracts may require a maintenance period, during which the bond remains in effect to cover any defects or issues that arise after project completion. Only after this period, and with all conditions met, is the bond fully released.
Understanding Comprehensive Coverage: What Is a 100 Percent Performance and Payment Bond?
In our line of work, we’ve often worked on projects requiring a 100 percent performance and payment bond. This type of bond guarantees that the contractor will complete the project and pay all laborers, subcontractors, and suppliers in full. We’ve found that such bonds provide comprehensive protection for project owners, ensuring that the entire contract amount is covered, both for performance and payment obligations. This type of bond is particularly common in large construction projects where the financial stakes are high.
Securing Your Bond: How Long Does It Really Take?
We’ve gained insight into the process and timeline for obtaining a performance bond. Typically, it can take anywhere from a few days to a couple of weeks to secure a performance bond, depending on the contractor’s financial history, creditworthiness, and the complexity of the project. We’ve been able to determine that working with an experienced surety agent can expedite the process, as they can navigate the requirements and ensure that all necessary documentation is in order.
The Risks of Expiration: What Happens if a Performance Bond Lapses?
We’ve come to recognize the importance of monitoring the expiration of performance bonds. If a performance bond expires before the project is completed, the contractor and project owner may be left unprotected against potential risks. We’ve encountered situations where a lapse in bond coverage resulted in significant financial losses. Therefore, it’s crucial to ensure that the bond remains active until all contractual obligations are fulfilled and the bond is formally released.
Conclusion: The Crucial Role of Performance Bonds in Construction Projects
Performance bonds are vital in the construction industry, offering a safety net for project owners and ensuring that contractors meet their obligations. From our perspective, understanding the nuances of performance bonds—from their differences with bank letters of credit to the implications of their expiration—is essential for anyone involved in large-scale projects. We’ve consistently found that staying informed and proactive about performance bonds can prevent costly issues and protect all parties involved in a construction project.
See more at our Massachusetts Performance Bond page.
We make it easy to get a contract performance bond. Just click here to get our Alabama Performance Application. Fill it out and then email it and the Alabama contract documents to [email protected].
Contact us for surety bond Alabama.
