What is a Performance Bond in Florida?
How much does a Performance Bond Cost in Florida?
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 FL?
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 Florida. 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 Florida?
We make it easy to get a contract performance bond. Just click here to get our Florida Performance Application. Fill it out and then email it and the Florida 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.
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 FL
Just call us. We’ll work with you to get the best Florida bond possible.
We provide performance and payment bonds in each of the following counties:
West Palm Beach
See our Georgia performance bond page here.
Introducing The Tricks When Looking At performance surety bonds
performance surety bonds could be quite complicated to understand, specially if you don't understand how it actually works. Most people think of this as a kind of insurance, however it's only a kind of guarantee that the principal will do their work appropriately. Although insurance providers usually offer a performance surety bond, you cannot really call it insurance since it has a different function. Many people will require you to obtain a performance surety bond since they select your services because this is a form of guarantee to them.
If you'd like to obtain a license bond, permit bond, commercial bond and more, you have to understand how they work. We are going to give you some information about the importance of performance surety bonds and how they work.
A Simple Explanation On A performance surety bond
performance surety bonds will always be asked for by the public because it will secure them and it will guarantee that the principal will fulfill their commitments. You are the principal so you have to get a license performance surety bond to guarantee that your company will usually abide by the laws and you must get a contract bond to guarantee that a public construction project will be finished. There are examples that will offer an idea on performance surety bond.
This is actually made for the clients as they will be protected by the bond, but it can provide advantages to you as well since they would trust you in case you have this.
How Does It Work?
performance surety bonds are a three-party agreement between a surety company, the principal and the obliged. The principal is actually the employer or company that will carry out the work while the obliged is referred to as the project owner.
Construction companies will invariably be required by the law to buy performance surety bonds when they're going for a public project. If the government has to do a public project, the winning contractor must secure several bonds.
The bond will make sure that the sub-contractors and the other workers will likely be paid even when the contractor defaults. The contractor will likely be responsible in covering the losses, but once they reached the limit, the duty will fall to the surety company.The contractor will cover the losses, but once they actually reached the limit, the duty will really fall to the surety company.
Applying For A performance surety bond
Insurance businesses frequently offer performance surety bonds, but there are some standalone surety companies that concentrate on these products. Surety businesses will always be licensed by a state Department of Insurance so just be sure you check first before you avail. It will not be simple to apply for a bond as the applications will have to go through checking before it's approved. The bond underwriters will evaluate the financial history of the candidates, credit profile and other important aspects.
It implies that there's a chance that you won't be accepted for a performance surety bond, specially if you have a bad credit rating.
How Much Is A performance surety bond?
You can't put an exact price for a performance surety bond as it can be impacted by different factors like the 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 on the bond that you want to obtain. The amount of bond that you are going to avail can also be an issue since you may pick a $10,000 bond or a $25,000 bond or higher.
If you have a credit history 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 performance surety bond amount. This means that if you can actually get a $10,000 bond, you just need to pay about $100 to $400.
Is There A Chance Of Being Denied?
There's a possibility that your license and permit bond will be denied by the insurance businesses and it will always depend on the background check that they did. If they actually believe that you are a big risk to them, they will deny your application. Credit score will be a deciding factor as well because if you will have a bad credit history, it's going to be difficult to get a performance surety bond because organizations will think of you as a risk. If you have a bad credit history, you can still be approved, but you will have to pay an interest rate of 10 to 20 percent.
If you're going to get a performance surety bond, make sure that you actually understand what it may offer. It's hard to apply for it, but if you know more about this, it will be a little easier to be accepted.