{"id":1310,"date":"2013-07-20T04:47:21","date_gmt":"2013-07-20T04:47:21","guid":{"rendered":"http:\/\/suretyone.com\/blog\/?p=1310"},"modified":"2017-01-03T16:20:32","modified_gmt":"2017-01-03T16:20:32","slug":"what-is-a-bid-bond","status":"publish","type":"post","link":"https:\/\/suretyone.com\/blog\/what-is-a-bid-bond\/","title":{"rendered":"What Is A Bid Bond"},"content":{"rendered":"

As a surety-specific agency with a national footprint we numerous requests for “bid bonds<\/a><\/strong>” each day. \u00a0Contractors who have dealt with corporate sureties are aware of what these are however many new and smaller construction and commercial services contractors do not. \u00a0Because a bid bond seems to be very small, especially when compared with the underlying project total, contract surety<\/strong> applicants often do not understand why we request fairly in-depth information when reviewing a bid bond request. \u00a0The following description written by the NASBP in conjunction with the AGC is very helpful in understanding the bid bond obligation.<\/p>\n

“A bid bond<\/a><\/strong> is provided as the basic instrument of prequalification. Prequalification in this context means that the surety has investigated the contractor sufficiently to be convinced that it can safely issue a bid bond on a given project. The bid bond states that the contractor will enter into a contract if the contractor\u2019s bid is accepted, and the contractor will furnish whatever additional bonds (performance bonds<\/strong> and payment bonds<\/strong>) are required. If the contractor fails to do either, the bid bond specifies the amount, called the penalty, that may be paid as damages. The bid bond may be a forfeiture bond where the surety is liable for a fixed amount of the bond as expressed in dollars or as a percentage of the amount of the contractor\u2019s bid regardless of the damages to the owner. Sureties are generally reluctant to issue forfeiture bonds as bid security. Usually the surety, under a bid bond<\/strong>, may be liable for the lower of the bid bond penalty or the difference between the contractor\u2019s low bid and the contract price the owner must pay to the firm ultimately awarded the contract. In no event will the surety be liable for more than the penalty stipulated in the bond.”<\/p>\n

So, a bid bond<\/a><\/strong> is essentially a guarantee that if the contractor “wins” the project, that surety WILL provide a performance bond<\/strong>, payment bond and\/or maintenance bond<\/strong>. \u00a0As underwriters we must always assume that our contractor will submit a reasonable bid and be awarded the job. \u00a0So, we underwrite the project and the maximum amount of bonding that we foresee will be required. \u00a0We do NOT qualify a contractor for a bid bond.<\/p>\n

National surety leader<\/strong>,\u00a0Surety One, Inc.<\/a>\u00a0focuses on supporting the performance bonding needs of the commercial, highway, heavy industrial and construction contracting industries. \u00a0We offer performance bonds<\/strong> to construction and commercial service contractor applicants small and large. Visit\u00a0SuretyOne.com<\/a>, call\u00a0(787) 333-0222<\/span>\u00a0or\u00a0(800) 373-2804<\/span>, or email\u00a0Underwriting@SuretyOne.com<\/span>\u00a0for a performance bond<\/strong>\u00a0application package or information about any surety bonding need. Recu\u00e9rde que le asesoramos en SU idioma, as\u00ed que comun\u00edquese con nosotros, SU compa\u00f1\u00eda afianzadora preferida para la fianza<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

As a surety-specific agency with a national footprint we numerous requests for “bid bonds” each day. \u00a0Contractors who have dealt with corporate sureties are aware of what these are however many new and smaller construction and commercial services contractors do… Continue Reading →<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[328],"tags":[26,27,1589,28,1590],"yoast_head":"\nWhat Is A Bid Bond • Surety One, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/suretyone.com\/blog\/what-is-a-bid-bond\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is A Bid Bond • Surety One, Inc.\" \/>\n<meta property=\"og:description\" content=\"As a surety-specific agency with a national footprint we numerous requests for “bid bonds” each day. \u00a0Contractors who have dealt with corporate sureties are aware of what these are however many new and smaller construction and commercial services contractors do... 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