What is a Performance Bond in South Carolina?
How much does a Performance Bond Cost in South Carolina?
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 SC?
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 South Carolina. 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 South Carolina?
We make it easy to get a contract performance bond. Just click here to get our South Carolina Performance Application. Fill it out and then email it and the South Carolina 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 SC
Just call us. We’ll work with you to get the best South Carolina bond possible.
We provide performance and payment bonds in each of the following counties:
Hilton Head Island
A Glance At Vital Elements When Looking At Contract Payment / Performance Bonds
Contract Payment / Performance Bond is something very important for anyone, but it's a little bit complex if you do not know anything concerning this. Fundamentally, this isn't an insurance claim, however it's a kind of guarantee that you, as the principal, will do the work appropriately for the obliged.
You must understand that most folks will expect you to obtain a particular bond before they consider your services since it would be a kind of guarantee for them. Since they want this from you, it's vitally important to search for an insurance company that will give this to you.
If you'd like to get a license bond, permit bond, commercial bond and more, you must know more about Contract Payment / Performance Bonds. Here are some of the things that you need to know.
A Basic Explanation On Contract Payment / Performance Bonds
Contract Payment / Performance Bonds will be asked for by the public because it can protect them and it may also guarantee that the principal will fulfill their duties. As the principal, you have to get a license Contract Payment / Performance Bond to guarantee that your company will abide by the laws and you need a contract bond to be sure that a public construction project will likely be completed. These are just a few examples which will offer you an idea about Contract Payment / Performance Bonds.
This is actually made for the consumers because they're protected by the bond, but it will benefit you as well because they will trust you in case you have a Contract Payment / Performance Bond.
The Work Of A Contract Payment / Performance Bond
Contract Payment / Performance Bonds are known as a three-party agreement between the principal, the obliged and the surety company. The obliged is actually the project owner and the principal is the employer or company that will do the work. Construction companies will almost always be required by the law to obtain Contract Payment / Performance Bonds when they are employed for a public project. The government will be requiring a construction company to get a host of bonds before they actually work on a particular project. The bond will assurance that the subcontractors and the other workers will be paid even if the contractor will default. The contractor will probably be covering the losses, but when they reached their limit, the duty would fall to the surety company.
Applying For A Contract Payment / Performance Bond
Contract Payment / Performance Bonds are provided by insurance companies, but you may find some standalone surety businesses that concentrate on these products. Surety businesses are licensed by a state Department of Insurance.
It's tough to apply for a bond because the candidates will certainly experience a process that's similar to applying a loan. The bond underwriters will review the financial history of a candidate, credit profile, managerial team and other key factors.
It will mean that there's a chance that you won't be approved for a Contract Payment / Performance Bond, especially if the bond underwriters saw something negative.
How Much Do You Have To Spend?
You cannot really put an exact cost for a Contract Payment / Performance Bond because the cost can be impacted by numerous factors like the bond type, bond amount, where it will 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 really depend on the bond that you'll get. The amount of bound that you can avail may also be a big factor because you may select 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 can be eligible for the standard bonding market and you just need to pay 1 to 4 percent of the Contract Payment / Performance Bond amount. It indicates that if you may actually get a $10,000 bond, you only need to pay about $100 to $400.
Is There A Chance Of Being Denied?
There's a chance that the license and permit bond will be denied by the insurance companies and it would depend upon the background check that they did. If they think that it will be a big risk to give you a Contract Payment / Performance Bond, they will certainly deny your application. Credit rating can also be a deciding factor because if you actually have a bad credit score, it will likely be hard for you to obtain a Contract Payment / Performance Bond because organizations are considering you as a risk. If you have a bad credit score, you may still be approved, but you will have to pay an interest rate of 10 to 20 percent.
If you'd like to get your Contract Payment / Performance Bond, you need to be sure that you understand the process so you will not make a mistake. It won't be simple to apply, but if the requirements are met and you are eligible, you will get a Contract Payment / Performance Bond.