Paving Surety Bond
What is a Paving Bond?
A paving surety bond is a contract entered into by three parties who agree in writing to undertake a paving project. This bond serves the purpose of ensuring that all the involved parties, that is, the surety company, the contract performer (called the principal) and the beneficiary (the obligee) adhere to the requirements of the contract and that the work is carried out within the agreed timelines.
One of the requirements that should be met by construction firms is that they should have proper bonding before they commence working. This contract eliminates any chance that the contract will not be executed as precisely as it should be. Should the principal default on their promise, the obligee can file a claim process with the surety company.
Why is it Important?
It is a statutory requirement in many states that a contractor should have construction bond before they can undertake any construction project, including a paving project. A paving bond helps parties to a contract mitigate risk. It lends a sense of credibility and trustworthiness to the contractor. People will often refuse to hire a company/contractor, if they are not properly bonded. The best bonding agencies do not just sell bonds; they are experts at what they do and will be more than happy to take you through bonds of all kinds, including paving surety bonds. That’s what we do! Call us for all your bonding needs. We bond with highly rated companies such as The Hanover Surety, The Hartford, CNA, and more.
Types of Bonds
Did you know that there are more than 50,000 surety bond types in the United States? Finding the precise type you need can be a little challenging. Sureties are a requirement when you want to perform public projects or large projects. The regulations relating to such requirements may differ from state to state. Be sure to confirm this with us…we’re the dependable agents. Contact us to get Bonded Today! Learn what it means to be bonded. As always, we only bond with highly rated bonding companies.
Who Needs a Paving Bond?
Companies and other business organizations engaged in construction work will need to procure this bond. You will need it if you are a paving contractor. Suppose you want to bid for a paving contract with your local county council. Typically, you are required to obtain a bond and submit documentation as part of the bidding process.
Why The Obligee Needs a Paving Bond
The obligee understands the importance of working within the framework of a written contract. They want to be sure that the contractor will keep their end of the bargain. If the principal cannot complete the project for whatever reason, the surety company will have to pay the obligee the full amount of the value of the bond. This will help them hire a different contractor to finish up the work.
It is an annual payment and the amount payable is not fixed. The type of surety required, the specific state that requires it, and the applicant’s credit score are a few of the factors that determine the price. Credit score is the most important factor in determining how much the bond will cost. Paving contractors with solid credit typically pay 0.75%-2.5% of the bond amount while those with bad credit usually pay between 2.5% and 10%. We will discuss with you and agree on the best rate about your specific situation. These rates are constantly fluctuating, so you’ll need to call us to get a more accurate quote. Quotes are always free.
Cost Saving Tips:
Improving your credit score is the most effective way to bargain for a lower bond premium. This may not always be possible but you can:
- Provide financial statements that show you can repay potential claims.
- Improve your personal or business liquidity by collecting on debtors. Demonstrate a strong financial capability
- Showcase your level of experience on your resume and attach it to your application. More experienced applicants may pay less premium
- Apply for a U.S passport if you are not a citizen.
- Use the right bonding agency. Work with an agent who work with many surety companies because this ensures that you get the most competitive rates in the market. Surety by NFP is your one stop shop for paving bonds.
Where To Get These Construction/Paving Bonds
Surety by NFP has been the industry leader in Paving and Construction Bonds. Contact us at (800) 863-3210, and request a free quote. We’re always happy to talk, and better understand your specific need so that they can recommend the most suitable surety for your situation.
So Where Do You Start?
If you are uncertain about the type of bond you need, contact us today. We are an agency that works with several top-rated bond carriers including Travelers Surety, Chubb Surety, and Western National Surety. with several surety companies as this means that they can offer you some of the most attractive rates in the bond market. They should be able to work with you, even when your credit score is poor.
Surety by NFP has been writing road construction bonds since 1984! We are the Paving Bond experts, so contact our office today! We appreciate your business.