We are a surety only agency that thrives on creating an unbeatable client experience! Our industry leading bond volume allows us to create programs that can be tailored to each individual client, getting them their bond faster at the cheapest cost! Below are a few reasons our clients love to work with us:
A Construction Bond, most commonly referred to as a contract bond, is used as a guarantee between 3 different parties during a construction project. This type of contract bond ensures no disruptions or financial loss occurs due to the contractor’s failure to complete the project or meet all specified demands as agreed upon. The 3 parties involved in a construction bond include:
Each member of this agreement plays a crucial role. The Principal is the person who purchases the bond, guaranteeing that they will complete the project to the standards as agreed to in the contract. The Obligee is who the bond protects in case of faulty work or monetary loss. The Surety is the company that takes responsibility for the Principal’s performance, guaranteeing they will adhere to the contract.
The cost of a Construction Bond varies. The cost of the project will play a significant role in deciding the total bond amount. The Principal will then pay the bond premium which is a small portion of the entire bond cost. This premium rages based on the Principal’s credit, current and past finances, and bond history. With good credit and good-standing with previous bonds, a contractor can expect to pay between 1%-3% of the total bond cost.
Construction Bonds are required for all government building or improvement projects and can also be required by privately-owned construction projects as well. This bond type is required to ensure that the project owner, be it private or government, is protected from faulty or incomplete work, ensuring no monetary loss on behalf of the hired contractor. A contract is agreed upon by all parties and if the contractor fails to meet all specifications in the contract, the Obligee can open a claim with the Surety for compensation.