Archive for the ‘contract surety bonds’ Category

Why a bid bond is required

Monday, June 8th, 2009

A bid bond is surety bond that guarantees the obligee that the principal will be able to honer their bid. Some times obligee’s will not accept cash for the bid only a bid bond.

If the contractor has the lowest bid they will be awarded the contract. Once this occurs the bid bond will turn into the final bond. They surety will still need to see the top three bidders before the payment and performance bond will be issued. If there is to much of a bid spread the surety will not issue the contract bond.  If the bid is closed the surety will require a letter from the obligee stating that. Bid bonds help weed out contractors that can not support the project financial.

How bid bonds help contractors

Bid bonds help contractors free up working capital because if they did not have a bid bond the contractor would have to furnish cash in lieu of the bid bond.

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Different bonding needed for contractors

Friday, June 5th, 2009

What is bonding?
Bonding is where a principal obtains an extension of surety credit. In most cases when you refer to bonding you are referring to a contractor that has obtained bonding for their business like a bond line.

What is a Bond Line
A bond line is where the contractor has a line of surety credit to be used for future construction projects. Underwriting for performance bonds can be a long process but if you a bond line you do not have to reapply for every bond or bid bond you need.  When you have established a bonding relationship with the surety the surety normally requests updated financials every quarter.

What is a Bid Bond
In order to obtain a bid bond you must first qualify for what the final bond will be. There is some confusion about bid bonds.  You must qualify for the total contract amount not just what the bid bond will be. So if you need a $10,000 bid bond the surety is not underwriting off of that amount, but what the final bond will be. Usually a bid bond is an percentage of the total contract amount so if your bid bond is $10,000 and it is   5% of the total contract amount the final bond needed would be $200,000. So the surety will underwrite your application off of the final contract amount

What is a Final Bond
A final bond is also called a payment and performance bond. A final bond is when you have been awarded a bid. The bid bond than turns into the final bond you must sign the final bond reflecting the full contract amount and turn the bond into the obligee.

What is a Contractor license bond
A contractor license bond is a state requirement giving you the legal ability to perform constructions jobs in the state your business is operating in.  Obtaining a contractor license bond is usually the last step for the state to grant you your license.

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Maintenance Bonds another type of surety bond

Thursday, May 21st, 2009

A maintenance bond is also other part of surety bonds offered by the bonding companies. This maintenance bonds are used after the completion of the contract by the contractors. This maintenance bond is used to maintain the construction after the work is completed. Performance and payment bonds are used till the completion of the contract. After the completion of the contract this maintenance bonds is used to ensure proper maintenance of the construction.

This bond guarantees the performance of the contract. It covers the time after the building is completed. These types of bonds are called maintenance bonds. This bond stipulate the building stability and maintenance responsibility of the construction company after the building ha been completed.

These bonds have existence for at least one to two years even after the structure has been completed. Only certain construction will extend beyond the circumstances. This maintenance bonds are always issued before the construction begins in combination with the performance bonds.

We are the surety bonding company specialized in providing maintenance surety bonds. Our integrity bonding company will ensure you that we will provide affordable bonds to you and also ensures that we will guide you in every aspect needed. Our bonding company gives you guarantee that we will perform our obligation as per the terms and condition of the contract. If you have any queries, immediately contact our website Surety Bond from Integrity Bonds and available  the services provided by our company.

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Surety Bond from Integrity Bonds

Wednesday, August 6th, 2008

Surety Bond from Integrity Bonds

Around the world, surety is an old-age form of legal contract and has a well-documented history in commercial as well as personal transactions. A surety bond is entirely a three-party agreement by which the surety binds for discharging the contracted obligations of a principal to an obligee in the event that the principal fails to complete obligations. Commercial surety bonds have proven to be more cost effective method of ensuring compliance with an assortment of important laws and regulations. Most commercial surety bonds are authorized by government bodies and agencies as specified in the requirements of various acts and regulations that are relevant to finicky business activities. Entities wishing to undertake such business are in charge of providing the required bonds.

Private sector transactions call for commercial surety bonds. The surety’s obligation is inadequate to the bond penalty. The construction industry is the major user of contract surety bonds and they are indispensable on most of the government projects and are particular in the private as well as institutional sectors often. Contract surety bonds, through the surety company’s strength and meticulous pre-qualification procedures, provide security to owners, sub-contractors and others that a contractor will renovate plans and specifications into a timely, successful and finished project. Surety is referred to as the bonding company or Surety Company and the obligee is the owner but he may be a general contractor too.

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