What is a Performance Bond in Alaska?
How much does a Performance Bond Cost in Alaska?
The cost of a performance bond can vary widely depending on the amount of coverage that is required. It is based on the total amount of the contract. Things that can affect this pricing are the perceived risk of the job, the financial position of the entity being bonded, plus other factors.
How much do bonds cost in AK?
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 Alaska. Please call us today at (913) 225-8501. We’ll find you the very best rate possible for your maintenance bond or completion bond.
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These rates are for Merit clients, Standard rates are higher
How do I get a Performance and Payment Bond in Alaska?
We make it easy to get a contract performance bond. Just click here to get our Alaska Performance Application. Fill it out and then email it and the Alaska contract documents to [email protected] or fax to 866-594-2771.
You can also call us at 913-225-8501. 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 matter. 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.
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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 AK
Just call us. We’ll work with you to get the best Alaska bond possible.
We provide performance and payment bonds in each of the following counties:
Fairbanks North Star
Lake And Peninsula
Prince of Wales-Outer Ketchikan
See our Arizona performance bond page here.
Guidelines When Looking At Performance Surety Bonds Discussed
You need to know that a surety bond is really important for anyone, but it’s complex if you do not know anything about this. This isn’t regarded as an insurance claim as it is a kind of assurance that the principal will do their job properly. You have to understand that some individuals expect you to get a bond before they will think about your services because it might be considered as a form of guarantee to them. Since they need this kind of thing from you, it’s going to be important to seek out an insurance company that can offer this to you. If you want to look for a license bond, permit bond, commercial bond and more, you have to know what this signifies.
The Importance Of A Performance Surety Bond
Surety bonds will always be necessary to protect the public since it is a type of guarantee that your obligations and duties will probably be complete. You will have to get a license surety bond to make sure that the company will always adhere to the laws and you can get a contract bond to make sure that the public project will be completed. Normally, a surety bond is meant for the obliged as they are the ones that are being protected, but it would benefit you too because the clients will trust you for those who have this. There are plenty of bonds today and the type of bond that you would like to search for will depend on the specific situation.
How Does It Work?
Surety bonds are actually considered as a three-party agreement among a surety company, the principal and the obliged. The principal is actually the employer or company that will complete the work while the obliged is generally known as the project owner.
Construction companies are asked for by the law to acquire surety bonds once they are picked for a public project. Once the government demands a construction company to do something, the winning contractor should secure a host of bonds.
The bond will assure that the sub-contractors and the other employees will likely be paid even when the contractor defaults. The contractor will be responsible in covering the losses, but as soon as they reached the limit, the duty will fall to the surety company.The contractor will handle the losses, but as soon as they actually reached the limit, the duty will obviously fall to the surety company.
Applying For A Surety Bond
Insurance providers often offer surety bonds, but there are some standalone surety companies that focus on these products. Surety businesses will truly be licensed by a state Department of Insurance so you must check it first before you avail. It will not be easy to apply for a bond as the applications will need to proceed through checking before it is approved. The bond underwriters will evaluate the financial history of the applicants, credit profile and other key factors.
It implies that there’s a chance that you won’t be approved for a surety bond, particularly in case you have a bad credit rating.
How Much Are You Going To Spend For This?
There’s no fixed if you are thinking about a surety bond as it can still depend upon various reasons like the bond type, bond amount, where the bond will be issued, contractual risk, credit rating of the applicant and more. There are lots of bonds available today and the cost will still depend on the type that you’ll get. The amount of bond is not really an issue because you could get a $10,000 bond or a $25,000 bond. If your credit score is above or near 700, you will certainly qualify for the standard bonding market and you only need to pay about 1 to 4 percent of the surety bond amount. If you can get $10,000 bond, it will only cost $100 to $400.
Your Application Can Be Refused
There is actually a chance that your license and permit bond request will be declined by the surety company as it will invariably depend on the info that they can get from the background check. If the surety company thinks that it would be a risk for them to give you a surety bond, they will deny your application. Your credit score is one of the most important factors to be approved for a surety body because in case you have a bad credit history, it will likely be hard to obtain a surety bond.
If you’ll get a surety bond even if your credit rating is bad, you’ll pay an interest rate of 10 to 20 percent.
If you are going to get your surety bond, make sure that you understand the whole 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 may get a surety bond.