What is a Performance Bond in Kentucky?
How much does a Performance Bond Cost in Kentucky?
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 KY?
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 Kentucky. 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 Kentucky?
We make it easy to get a contract performance bond. Just click here to get our Kentucky Performance Application. Fill it out and then email it and the Kentucky 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 KY
Just call us. We’ll work with you to get the best Kentucky bond possible.
We provide performance and payment bonds in each of the following counties:
See our Louisiana Performance Bond page here.
Inside Main Requirements When Looking At P&P bonds
You'll need to understand that a P&P bond is essential to any person, but it's quite complex if you don't have any idea about this. This is not an insurance claim as this is a form of guarantee that the principal will properly do their job. You'll need to know that some individuals will obviously expect you to get a particular bond before they opt for your services because it will also be a kind of guarantee to them. Because they need this kind of thing from you, it's going to be very important to seek out an insurance company which can offer this to you. If you genuinely wish to consider a license bond, permit bond, commercial bond and more, you have to understand what it means.
The Importance Of A P&P bond
P&P bonds are always required since they protect the public. It is a form of guarantee that the obligations and duties will probably be completed. You will have to get a license P&P bond to make sure that the company will always follow the laws and you can get a contract bond to make certain that the public project will be completed. Usually, a P&P bond is meant for the obliged because they are the ones which are being protected, but it would benefit you as well since the clients will trust you for those who have this. There are lots of bonds today and the type of bond that you want to look for will depend upon the specific situation.
How It Works
P&P bonds can already be regarded as a three-party agreement between the principal, the surety company and the obliged. The principal is actually the employer or company which will provide the services and the obliged is the project owner. Construction businesses are generally needed to purchase P&P bonds once they are considering a public project. Once they want to work on the project, the government will require the construction company to secure a number of bonds.
The work of the bonds is aimed at the subcontractors and employees to guarantee that they will likely be paid even if the contractor defaults. The contractor will likely be covering the losses, but once they reached the limit, the duty will really fall to the surety company.
Applying For A P&P bond
Insurance providers frequently offer P&P bonds, but there are some standalone surety businesses that specialize in these products. Surety businesses are typically licensed by a state Department of Insurance so you have to check it first prior to deciding. It won't be simple to apply for a bond because the applications will need to go through a background checking procedure. The bond underwriters will need to look at the financial history of the candidates, credit profile and other key factors.
It indicates that there's a possibility that you will not be accepted for a P&P bond, especially if your credit rating is bad.
How Much Do You Have To Spend?
You can't really put an exact cost for a P&P bond because the cost might be impacted by various factors like the bond type, bond amount, where it will likely be issued, contractual risk, credit score of the applicant and more. There are actually thousands of different bonds available right now and the cost will truly depend on the bond that you are going to get. 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 already have a credit score of 700 and above or very near this number, you may qualify for the standard bonding market and you just need to pay 1 to 4 percent of the P&P bond amount. It only means that if you'll get a $10,000 bond, you only have to pay $100 to $400.
The Approval Of Your Request
There's a possibility that your license and permit bond request will actually be denied by the insurance providers and it will always depend upon their background check. If they actually feel that giving you a bond will be a big risk, they won't release a P&P bond for you.
Credit rating is also an issue because in case you have a bad credit rating, it would be very hard for you to obtain a P&P bond as the companies consider you as a risk. In case you have a poor credit history, you may be approved for the bond, but you need to pay an interest rate of 10 to 20 percent.
There's a chance that your application will be declined so you have to look into the requirements before you apply.
If you are going to acquire your P&P bond, make sure that you understand the whole process so you won't make a mistake. It will not be simple to apply, but if the requirements are met and you are eligible, you will get a P&P bond.