Frequently Asked Questions

Bid Bond
A Bid bond guarantees that the contractor (bidder) will provide the required Performance & Payment Bonds if low and awarded a job. Bid bonds help to prevent contractors from submitting frivolous or inappropriately low bids to win a contract.

Performance & Payment Bond
Performance bonds are meant to protect the owner from the contractor defaulting on their obligations. Payment bonds are meant to guarantee to the subcontractors, suppliers and laborers who the contractor hires that they will receive payment for services and materials.

Street Obstruction Bond
Street Obstruction Bond. When building or construction projects involve the closing or obstruction of streets, alleys, or sidewalks, the construction company or contractor has to apply for an application with city officials that shows the amount of space the contractor will use.

Mechanic’s Lien Release Bond
A Mechanics Lien Release Surety Bond is a surety bond required if the owner’s property has had a lien filed against it. … The bond guarantees the contractor who placed the lien any payment that is still due to them with interest and cost should they win the case in a court of law.

Road Opening Bond
Opening Streets Permit bonds are required by The to comply with the state, city, county, or federal government licensing requirements. The obligee is the government entity requiring you to get the bond. Each entity has their own Opening Streets Permit Bond Form, so you will need a different Opening Streets Permit bond for each state you will be transacting business in.

License and Permit Bond
License And Permit bonds are required by The to comply with the state, city, county, or federal government licensing requirements. The obligee is the government entity requiring you to get the bond. Each entity has their own License And Permit Bond Form, so you will need a different License And Permit bond for each state you will be transacting business in.

Premium

The cost of the bond paid by the principal to the surety in exchange for the financial guarantee provided by the bond. The bond premium is typically a percentage of the total bond amount.

• The cost/premium of a bond is determined by two factors: The risk associated with the account and the filed rate of the surety company. Below is a basic outline of the standard premium rates but your rate could differ depending on the circumstance:
  • Bid Bond – no charge EVER.
  • Performance Bond – 1% – 3% of contract price.
  • Payment Bond – included with performance bond cost.
  • License and permit bonds, Subdivision and Union bonds can have various rates associated with them that may differ from above and even your current account rate due to the varied degree of risk associated with each
• Small Business Administration (SBA)
• No annual or bid bond fees
• Access to several specialty markets in addition to the major markets