How to Process a Surety Bid & Performance Bond
Contractors may have to bid jobs to get work. If you bid a big job, you may have to provide a bid bond to the client before you can realistically be considered. The bid bond ensures that you will live up to your end of the bargain and provide a performance bond if you are selected as the contractor. Getting a bid and performance bond is relatively simple and it involves working with a surety bond seller or an insurance company.
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Instructions
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Determine exactly which type of bid and performance bond you need. Typically, on the plans for the construction project, the client will include information about the minimum size bond you must have to submit a bid.
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Locate a surety bond provider with which you can work. This could be a dedicated surety bond seller or it could be the business insurance department of an insurance company. If you are a contractor, you can most likely talk to the same insurance company you buy your general liability insurance from.
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Complete the necessary paperwork for the bid and performance bond. You will need to provide information about your business and its capabilities. You will need to provide your name, business address, Social Security number and any other information requested on the bid bond application.
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Answer any questions that the surety bond seller has about your business. The surety bond seller will have to check out your business and make sure that you are capable of handling the job. A surety bond is essentially a type of credit extended by the surety bond issuer. This means that the surety bond company will do its due diligence when checking you out.
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Take the paperwork that is given to you by the bond company when you are awarded the surety bond and then provide a copy to the client that you are bidding for. If you are awarded the contract, this bond will help protect your customer from the inconvenience that would come if you did not live up to your end of the deal.
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