Fidelity and Surety Bonds

WHAT IS A PERMIT BOND?

2010-11-08T15:54:00.000-08:00

When a contractor is required to obtain a permit from a city or town for a project many times a permit bond will be required. Permit Bonds are a sub-category of bonding. These commercial bonds guarantee that the contractor will obey all statutes, codes and ordinances required by the local government. Such bonds provide payment to the local government or, in some instances to third parties, for loss or damage resulting from violations by the licensee of the duties and obligations imposed upon him or her. These bonds are required before a permit is granted.

There are several different types of permit bonds, each guaranteeing something unique, and with its own amount of risk in the eyes of the bonding companies. For these reasons the rates vary from bond to bond. The usual cost for most of these bonds is $100. If you have less than perfect credit, or are just starting out and have no credit, please apply for our bad credit surety bond program. This program has higher rates, but allows those who would not typically bonded to get approved.

Not all cities or towns require permit bonds. When you file your paperwork to pull your permit you will find out if a bond is required. These bonds are as a general rule are good for one year and are valid for all jobs in that city or town. If you do work in another city or town you would be required to obtain a new bond for each city or town.

In most cases time is of the essence in obtaining Permit Bonds. When you do business with FIDELITYANDSURETYBONDS.COM you deal with a company that only writes bonds. Our expert staff will get you a bond the same day.

With FIDELITYANDSURETYBONDS.COM you will build a long term relationship.
Once established you will be able to get subsequent bonds in minutes!

If you deal with your local agent, bonding is just an afterthought to your local agents business. Most agents are unfamiliar with the bonding. Do not let their inexperience cause you delays because of the specialized nature of the bonding business. At FIDELITYANDSURETYBONDS.COM we have years of experience in dealing with the complexities of getting bonded. Our agents know the "ins and outs" of the bonding process.

Using an inexperienced agent can cost you time and more importantly money. Go with the best FIDELITYANDSURETYBONDS.COM.

Bid Bonds for Public Works Projects

2010-07-25T07:51:00.001-07:00

In almost all cases when a contractor is going to submit a bid for any project that is funded with public funds a bid bond will be required. Most of the public construction work is accomplished by private sector firms. These jobs are awarded to the lowest responsive bidder through a competitive sealed bid system. Surety bonds play a vital role in making the bidding process work.

The use of the Bid Bond is to keep unqualified bidders out of the bidding process by assuring the contractor will honor its bid and will sign all contract documents if awarded the contract. Further it shows that the contractor will be able to provide the required performance and payment bonds if awarded the job. If the lowest bidder fails to honor these commitments, the owner is protected, up to the amount of the bid bond, usually for the difference between the low bid and the next higher responsive bid. In most cases this going to be five to twenty percent of the bid amount. The use of corporate surety bonds makes it possible for the government to use private contractors for public construction projects under a system where the work is awarded to the lowest responsive bidder. Political influence does not come into play and the government is protected against financial loss if the contractor defaults. An added benefit is that certain laborers, material suppliers and subcontractors have a remedy if they are not paid, all without consequence to the taxpayer.

In most cases a cashier's check can be submitted with the bid in lieu of the bond. This can be a risky way to proceed, as the contractor would lose the money if they were unable to secure the payment and performance bonds. This method is sometimes used when time is short and the contractor is unable to secure the bid bond in time for the bid deadline.

The cost of the bid bonds for our clients are no more than $50 per bond, which we will refund if you are the successful bidder and secure the payment and performance bond with FidelityandSuretyBonds.com.

For bid bonds under $250,000 we have a simple one page application, that is based almost exclusively on the owner's personal credit. The Owners credit score should be 700 or greater. We can normaly get you your bid bond within 24 hours of a completed application.

WHAT IS A SURETY BOND?

2010-07-12T12:41:00.000-07:00

In its simplest form a surety bond is a contract among at least three parties. The first is designated the “OBLIGEE”, which is generally the party requesting you to get a bond for work you are about to perform or to guarantee that you will perform some obligation. The second is designated the “PRINCIPAL”, this is going to be you the party who will be performing the contractual obligation. Finally there is the “SURETY”, this is the company that will assure the OBLIGEE that you you will meet your contractual obligations.

The simplest way to explain a Surety Bond is that if you do not preform what you contracted to perform the SURETY will perform the contract.

The PRINCIPAL (you)will pay a premium (usually annually) in exchange for the bond. In the event of a claim, the surety will investigate it. If it turns out to be a valid claim, the surety will pay it and then turn to the PRINCIPAL for reimbursement of the amount paid on the claim and any legal fees incurred.

What are the different types of Surety Bonds?

There are many different types of Surety Bonds. The most common are Bid, Performance and Payment, License and Permit and Lost Instrument Bonds.

Things To Consider When Searching For Bid Bond Quote

2010-06-30T09:42:00.000-07:00

When bidding on most jobs where a Governmental Entity is the owner a bid bond will be required. The bid bond protects the Governmental Entity from unqualified bidders.

In most cases time is of the essence in obtaining bid bonds. When you do business with FIDELITYANDSURETYBONDS.COM you deal with a company that only writes bonds. Our expert staff can in some circumstances get you a bond the same day.

With FIDELITYANDSURETYBONDS.COM you will build a long term relationship.
Once established you will be able to get subsequent bonds the same day!

If you deal with your local agent, bonding is just an after thought to your local agents business. Most agents are unfamiliar with the bonding and are uniformed to the specialized nature of the bonding business. At FIDELITYANDSURETYBONDS.COM we have years of experience in dealing with the complexities of getting bonded. Our agents know the "ins and outs" of the bonding process.

Using an inexperienced agent can cost you a job and more importantly money. The reason is that once a bond company declines your submission other bonding companies will be alerted to this fact and will decline your account without even a review of your application. An experienced agent will be able to sell your application to the underwriter and will be able to place your application with the proper Surety company. Studies have shown almost 29% of declinations, of first time applications can be avoided if the client went with an experienced agent. Do not let your business be in that 29%

At FIDELITYANDSURETYBONDS.COM there is generally only a $50 charge for a bid bond. With some companies there is only an annual credit check of $100, with any bid bonds issued at no cost. Also as a courtesy to our clients these amounts will be credited against the cost of any Payment and Performance Bond Issued.

If you have any questions about Bid Bonds or any other type of bond Call us Toll Free at 866-786-8340 or emails us at INFO@FIDELITYANDSURETYBONDS.COM.