You can now apply online for a Performance Bond - it only takes three (3) minutes! (Yep, we timed it.) Click here:
- Complete the form and email to [email protected]
- Be sure to include the Contract and Notice of Award letter (bid specs from the obligee).
- Send the bid results if you have them
Performance bonds are typically paid by your business directly as part of the contractual process (for example, the contractual AIA forms that are typically used in the industry require the contractor to pay for the construction bond). There are some cases when other arrangements cannot be made; however, these agreements require more time from both parties to protect against risks of failure due to unforeseen circumstances outside of just not completing the project on schedule (for example).
That said, the owner indirectly pays for the bond as all contractors build the bond cost into their bid!
Who provides the Performance Bond?
In most cases, a performance bond is provided by an insurance company or other financial institution, known as the surety. These institutions provide the bond and cover it for any damages that may occur to them during their agreement with you. In industries like construction and real estate development they're very common - so don't forget about them!
What is the cost of a performance bond?
If you are a contractor looking to bid on an upcoming project, it is important for you to know that there may be some hidden costs. A performance bond will cost the owner of the project money as all bidders include this in their bids. This means if your company does not win and they must pay out a performance bond, then it's really them who pays for this charge through indirect payment via other contractors' fees.
A performance bond is an important contract requirement. It guarantees that a contractor will complete the work and satisfy all of their contractual obligations in relation to time, materials, quality, etc. All bidders should include this cost so don't be surprised if it's included when you receive your bid package!
Why Do I have to Purchase the Performance Bond?
Performance bonds are a great way to ensure that the construction or development process runs smoothly. In order for these important projects to go according to plan, it's necessary for everyone involved in them - from developers and architects on down through contractors and subcontractors - be able pay up if they don't live up their end of the bargain.
Performance bonds provide an additional level of security when it comes time for paying out sums which might otherwise not get paid at all due delays or other unforeseen circumstances. As a sign of good faith, performance bonds are often provided by the party providing services on an agreement. In industries like construction and real estate development, they're common in order to protect both parties involved from possible lack of work or money-related issues that may arise.
Go here for our Performance Bond Cost Calculator