Surety Bonds for Construction Bonds
What is a Construction Bond?
Construction bonds, also known as contract bonds, represent a type of surety bond. They provide a financial guarantee that the bills on a construction project will be paid. The issuing insurance company or bank guarantees the project’s completion by a specific contractor. Construction bonds protect the assets of the investor or project owner against shoddy work or non-completion of the project.
Each surety has its own criteria for deciding the eligibility of applicants for construction bonds. Standard criteria include having the right skill level, resources and ability to perform the requirements of the contract. The surety will analyze the applicant’s financial statements and investigate work history, financial standing and credit rating.
What is the cost of a Construction Bond?
For smaller and mid-sized clients, construction bonds cost about $100 per bid, or about $250 for unlimited bids for the year.
For a bond applicant with a good credit rating and a solid financial history, bond rates can be as little as .5 percent of the total value of the bond. High-risk applicants, such as those with bad credit histories, can expect to pay higher bond rates, usually anywhere between 5 and 20 percent of the total bond amount.
What if I have bad credit?
You can still qualify for a Construction bond. Keep in mind that personal credit is one of the main factors considered when writing these bonds as your financial credentials are seen as an indicator on the likelihood that a claim will be made against a bond. Therefore, higher risk applicants may still be accepted, however, may be assessed a premium amount.
Get a Construction Bond today!
1) Fill out the form on our website – this takes 30 seconds of your time and we will get back to you with a quote in less than 24 hours (oftentimes within the hour).
2) Call us directly at 781-559-0568 – we are here to help!