What is a Performance Bond in Virginia?
How much does a Performance Bond Cost in Virginia?
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 VA?
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 Virginia. Please call us today at (913) 562-6992. 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 Virginia?
We make it easy to get a contract performance bond. Just click here to get our Virginia Performance Application. Fill it out and then email it and the Virginia 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 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 VA
Just call us. We’ll work with you to get the best Virginia bond possible.
We provide performance and payment bonds in each of the following counties:
Isle of Wight
King and Queen
An Evaluation Of The Insider Secrets When Thinking About Performance Surety Bonds
Performance Surety Bond is extremely important for anyone, but this is quite complicated if you do not know anything regarding this. Basically, this is not an insurance claim, but it’s a form of guarantee that you, as the principal, will perform the work properly for the obliged.
You must understand that most folks will anticipate you to get a particular bond before they think about your services as it will likely be a form of guarantee for them. Since they actually want this from you, it is important to try to find an insurance company that can provide this to you.
If you want to get a license bond, permit bond, commercial bond and more, you must know more about Performance Surety Bonds. Listed below are the things that you must know.
The Importance Of A Performance Surety Bond
Performance Surety Bonds will almost always be in demand to protect the public since it is a form of assurance that your obligations and duties will be complete. You should get a license Performance Surety Bond to make certain that your company will adhere to the laws and you usually get a contract bond to assurance that a public project will be completed. A Performance Surety Bond is certainly meant for the obliged because they are the ones that are being protected, but it will also benefit you because the clients will trust you in case you have this. There are thousands of bonds right now and the type of bond that you’re searching for would depend on your situation.
How Does a Performance and Payment Bond Really Work?
Performance Surety Bonds are known as a three-party agreement between the principal, the surety company and the obliged. The principal is the employer, individual or company that will perform the work while the obliged is the project owner.
Construction businesses will usually be asked for by the law to purchase Performance Surety Bonds when they are going for a public project. As soon as the government demands a construction company to do something, the winning contractor should obtain a host of bonds.
The bond will guarantee that the subcontractors and other workers would be paid even when the contractor defaults. The contractor will likely be accountable in covering any losses, but once they already reached their limit, the duty will fall to the surety company.
The Application For A Performance Surety Bond
Performance Surety Bonds are actually offered by insurance organizations, but you could always search for standalone surety companies that will concentrate on these products. It will not be simple to apply for a bond as the applicant will need to experience a rigid procedure that is comparable to applying for a loan. The bond underwriters will review the financial history of the applicant, their credit profile and other key factors to make sure that they deserve to be approved. It also signifies that there is a chance that you will probably be denied for a Performance Surety Bond, specially when the underwriters found something negative on the credit history.
How Much Are You Going To Spend For This?
There is no fixed cost when you’re speaking about a Performance Surety Bond as it will still depend upon different reasons like the bond type, bond amount, where the bond will probably be issued, contractual risk, credit history of the applicant and more. There are literally thousands of bonds available today and the cost will always depend upon the type that you will get. The amount of bond will probably be an issue because you could always get a $10,000 bond or a $25,000 bond. For those who have a credit score that is above or near 700, you could qualify for the standard bonding market and you just have to pay about 1 to 4 percent of the Performance Surety Bond amount. If you will get a $10,000 bond, it will only cost $100 to $400.
Is There A Chance To Be Refused?
There is a chance that your license and permit bond request will be denied by the insurance companies and it will depend on their background check. Once they actually believe that giving you a bond will be a big risk, they won’t release a Performance Surety Bond for you.
Credit history is also an issue because if you have a bad credit score, it will be extremely tough for you to get a Performance Surety Bond as the businesses consider you as a risk. If you have a bad credit score and you were approved for the bond, you usually need to pay an interest rate of 10 to 20 percent.
There is a chance that your application will be rejected so check all the requirements before you apply.
If you wish to get your Performance Surety Bond, you have to be sure that you understand the process so you will not make a mistake. It will not be easy to apply, but if your requirements are complete and you are eligible, you may get a Performance Surety Bond.
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