What you need to know about Performance Bond

Are you looking for the best rate on a performance bond for a project you have negotiated bid on? Performance bonds are a way of guaranteeing a contractor will complete a project. Most commercial building projects require the contractor to bonded to either the project owner, the general contractor, or a government agency. The contractor that has won the bid to conduct the work on a project is required to provide a performance bond before the work can begin. These bonds are issued with payment bonds and are a common construction bond.

What does a performance bond do?

This type of surety bond will guarantee the project owner, the general contractor, or a government agency that the construction will be completed by the company who has negotiated or bid the project. If the contractor does not complete the construction according to the contract, the project owner, the general contractor, or a government agency. is guaranteed compensation for any money lost due to that breach of contract up to the amount of the bond. What does this mean for you? It means the bond must be obtained in the amount of the bid or final project contract amount.

How do I know what bond amount I can qualify for?

Download our application depending on what size project you want to be able to qualify for. This is what is called qualifying for a bond line. Some bond amounts will only be a credit check if you credit is considered good. Many larger contractors or bids will require full financial statements. See all out downloadable applications for performance and bid bonds

What do you need to apply for your performance bond?

Applying is easy. Once you have been awarded the contract, whether through a private, commercial or through a government entity you simply need to download one of our applications. USA

American Eagle bonds can provide you will all of the bonds you need for all your projects anywhere in the United States. Our application process is simple. All that you need to do is download our application fill it out sign it and send it back to us surety@usabonds.us or fax to 480-985-2209

What are the rates for a performance bond?

The rate will depend on:

–          The projects’ bid amount

–          Your financial credentials

–          Past work history

Is a performance bond required by law?

Not on private or commercial jobs, however the project owners or general contractor may require a bond. Depending on your city, state, and federal government the law on public construction projects may require that the contractor obtain a bond, with civil fines and other penalties if the contractor fails to do so. Did you know most of the governmental construction projects are completed by private firms? This is generally believed to be why the legal requirement for these bonds exist.. They give the government a form of protection to ensure the work gets done.

Previously, the government had issues with private firms that were insolvent, or became insolvent during the construction process before the project was finished and could no longer work. There were many unfinished projects due to this problem, and it forced additional costs onto taxpayers. From this came the rise of the bonds to guarantee the projects would be completed. At the federal level, the Miller Act requires performance and payment bonds on all federal construction projects. State and local governments may require bonds as well.

How do I know what the requirements are for my state?

If you are concerned about what the bonding requirements are where you are conducting business, you can visit http://usabonds.us. There, they have up to date and accurate information concerning all fifty states and Washington DC so that you are prepared.

What do you need to apply for your performance bond?

Applying is easy. Once you have been awarded the contract, whether through a private insurer or through a government entity, you simply need to go to your insurance company or bank that provides these types of bonds. For example, Top surety can provide you will all of the bond you need to complete your project, anywhere in the country. Their application process is simple. All that is required for a project granted for two hundred and fifty thousand or less is:

–          The amount of your bid

–          The bid date

–          Whether you have been bonded for previous projects

–          How long your company has existed

–          Your personal credit score

It is simple to get a quote and talk with a qualified representative to make sure you get exactly what you need to begin work on your project. If your project is worth more than two hundred fifty thousand, then there will be a requirement for more financial information with your application. At Top surety, they will review your information and quickly get you your bond.

 

 

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