A contractors bond is a specific type of surety bond that is required by contractors working on projects. As a contractor, this bond will help you and provide you with legal protection. Not only that, but it can also help the company who hired you.
Call (844) 612-7238
At Pinnacle Surety, we offer contractors bonds for the State of California. We can help you fill in your application form, get the right bond, and ensure your firm is licensed for the work you’re carrying out. If your job is valued at over $5000, then you are legally required to be licensed by the State of California Contractor’s License Board. If you don’t have a contractor’s license bond, then you could be fined a lot of money.
With our help, you will get all the coverage you need, ensuring that you can go about your work without worrying about any legal issues.
Alongside this, Pinnacle Surety can help with a range of other contractors bonds – including the following:
To figure out if you need a bid bond for a project, you have to consider the construction bond eligibility. In essence, this type of bond is necessary if you (the contractor) have bid on a project.
Project owners require that you get a bid bond as it guarantees that you are going to enter the contract if you win the bid and are awarded the job. As such, it stops instances where contractors place bids on numerous contractors and then back out of them if they get the jobs. When this happens, it can cost project owners a lot of time and money.
Penalties are awarded to contractors who don’t agree to honor a contract that they’ve successfully bid on. Typically, the penalty is around 10% of the estimated project value, but some Federal construction projects go as high as 20%.
As well as ensuring that contractors agree to the work, a bid bond also forces them to get performance and payment bonds as well. Most public work projects require a bid bond, and all federal projects need one.
Pinnacle Surety can help you apply for a bid bond and check the construction bond eligibility criteria to see if you need one. We offer a 24-hour turnaround on bond program pre-qualifications and approval for these bonds. Thanks to our vast experience, we ensure that you get the bond you need before bidding on any projects.
Bid bonds are vital as you will struggle to find work without them. Project owners are not likely to employ contractors that don’t have this crucial piece of protection. Plus, some projects legally required you to have one, which means this isn’t something you can afford to neglect.
As mentioned above, performance bonds are required in conjunction with bid bonds. As the name suggests, these bonds relate to the performance of a contract. Performance bonds give project owners the security they need to ensure that contractors will meet all the terms and conditions outlined in a contract.
Furthermore, performance bonds state that a project will be completed within a specified time – and for a price that both parties agree upon.
Effectively, they’re in place to give project owners financial protection. What happens if a contractor starts taking up a job but doesn’t complete it? Perhaps the construction company goes bust, and they can no longer go ahead with their work. The project owner is left with a half-finished project that’s worth nothing to them. Money is thrown down the drain, and they need to pay for a new contractor to come in and take over. With a performance bond, they can recover any financial losses in an instance like this.
Most public works projects will require a public works performance bond, but a lot of private projects are also implementing them these days. As a contractor, you may also need performance bonds from your subcontractors. It’s not essential, but many believe it’s a smart thing to do as it gives you some protection.
If you’re unsure whether or not you need a performance bond, then Pinnacle Surety can assist you. We’ll guide you through the legal process and help you with your application.
Payment bonds typically come alongside performance bonds for construction contractors. Again, they are legally binding instruments that give project owners some extra security. Here, the bond aims to make sure that contractors will pay all monies relating to subcontractors, their labor force, and any material supplies they require for a project.
In essence, it stipulates that the contractor is financially responsible for funding their own work. So, they can’t demand additional money from the project owner to pay for subcontractors, laborers, and so on.
Generally speaking, payment bonds are required to be executed by the surety in an amount that’s equal to the overall contract price. In some cases, payment bond penalties can be less than the value of the contract – but this depends on the agreement terms set it place.
Again, these bonds are usually required on most public works projects. Not only do they protect project owners, but they also protect any subcontractors, laborers, and suppliers. With the bond in place, this guarantees that they will receive payment from the contractor.
Applying for a payment bond and getting the right approval can be tricky, which is why we will help you with all of this.
Need A Contractors Bond? Contact Pinnacle Surety
If you need any type of contractors bond, then contact the team at Pinnacle today. We’ve been offering surety bonds for over twenty years, and we understand the challenges faced by modern construction contractors. We will help you with things like construction bond eligibility, and our fast turnaround times are hard to beat. When you contact us with your details, we aim to get back to within 24 hours with information on your approval status.
Contractors’ bonds are essential for many construction-related projects, and the penalties for not having them can be high. Contact us today, and we can provide you with a quote for our services.
Check out Pinnacle Surety on Social Media.
We know it isn’t easy keeping up with industry trends and information—that’s why we’re here to help!
In our effort to support our partner and client initiatives, Pinnacle’s official Social Media channels are now up and running to provide company news, articles, blog updates, insider tips and thoughtful discussion!
We hope you’ll join us by giving Pinnacle a Follow on our Facebook and Twitter accounts and chiming in on the conversation! Have any questions, comments or concerns? Send us a PM on Facebook or give us Tweet at @PinnacleSurety.