Surety1’s performance and payment bond experts have access to 15 markets to provide you with the coverage you need. We understand that you have a business to run and bids to prepare. Our goal is to provide you with your bond in record time and with the least amount of work or worry on your part. Payment and performance bonds include the following:
- Bid Bond: This is a type of surety bond that is often required when submitting a public works bid proposal. A bid bond is a guarantee that if you as the principal are awarded the contract, then you will enter into the agreement at the proposed price. The bid bond is typically a percentage of the bid amount and should be listed in the bid specifications.
- Performance Bond: Congratulations! You’ve been awarded the contract. Now you need a performance bond to protect the obligee/owner in the event that you are unable to complete the project. The surety company will guarantee the project is physically completed as outlined in the contract. The performance bond is usually 100% of the contract amount.
- Payment bond: This is another type of surety bond that is often required once you are awarded the contract. The payment bond protects the obligee/owner in the event you are unable to pay your vendors and suppliers. The payment bond guarantees that all suppliers and vendors will be paid by the surety company if you can’t meet your obligations. The payment bond only guarantees that all outstanding invoices associated with the project will be paid. The payment bond is normally 100% of the contract amount.
What is the process for obtaining a performance and payment bond?
- We do the heavy lifting by matching your needs with the right bond provider. You simply complete and submit one of our application forms below. We recommend that you be as thorough and detailed as possible to expedite the process that underwriters take when assessing your risk.
- It is advisable to have your accountant, bookkeeper or other financial advisor involved in the process, as you will have to submit financial documents.
- A credit history check will be conducted and, if necessary, other inquiries will be made in order to be approved for a payment or performance bond. No searches are conducted without your signed approval as per the Fair Credit Reporting Act (FCRA).
What is the fee for a performance bond?
The fee for a performance bond varies depending on a number of factors which will be determined during the risk assessment. There are many variables that can affect the price, so we cannot provide a quote until we’ve had time to go over your application. Infrequent users of surety credit, or smaller independent contractors will usually pay 2 to 3 percent. More established contractors with a history can usually obtain bonds at rates starting at 1 percent.
The team at Surety1 has a wealth of knowledge and the connections to place almost any size bond. We can help you find ways to grow your surety capacity.
Complete and submit an application for Performance Bonds up to $400k