Bonds are not insurance. A bond is a guarantee by the bonding company that your company will perform the job/duties as stipulated, such as payment of taxes, repair road damage due to a road cut. If you don't do what you are suppose to the the bond company will do so for you and then look to you for reimbursement. Some become underwritten much like a bank loan, since it is a guarantee of your ability to physically and financially do what is expected of you.
Contractorís Payment and Performance Bonds for Small Jobs Up To $300,000.
We can a submit and issue bonds up to $250,000 - 300,000 within 1-3 days in most cases based solely on a credit check of the owners. Complete a short app, submit to a credit check, and as long as your credit is good we should have your contract bond issued quickly. This is as simple as contractors payment and performance bonds can get. the bond company is guaranteeing to the project owner or possibly GC that you have the funds and ability to manage and complete the job and will pay all suppliers.
Contract Payment and Performance bonds $250,000 up to several million dollars. This is an involved process of submitting your business and personal financials, work history and company history to the bond underwriter. The bond underwriter determines what job limit they will bond you for and what your aggregate limit of bonded work under contract at any one time can be. Contract payment and performance bonds for larger construction jobs are earned and planned for, with professional assistance.
Contractors Bid Bondís
A bond guaranteeing that your bid will be honored if accepted. This is normally 5% or 10% of the amount bid. Bid bonds are very cheap and are usually in conjunction with an established payment and performance bond program or approved job bid.
License and Permit Bonds
Permit bonds for city license, etc. Most done for $100 within a short time and issued same day.
Auto dealers state license bond. $450 approx. Done on-line and issued same day.