Surety bonds exist to protect both your company and the clients that you work with. When you have a surety bond in place, it reassures your client that they won’t suffer if the promised work isn’t delivered. Many project owners, including those in charge of public contracts, will require a bid bond before agreeing to choose a contractor.

Even simply choosing the bidder that they want could backfire if that company then doesn’t sign the contract. They could end up having to choose a more expensive contractor and delaying their project. A bid bond offers them protection from any loss that they might suffer if the contract isn’t signed. They can make a claim for the difference between the bid and the next lowest bid. The bid bond tells them that the contractor is able to complete the job. As a contractor, a bid bond helps you to win more work, fulfilling a requirement that many have in order to accept a bid.

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Why You Need Bid Bonds

Bid Bonds ProtectionIn many cases, you won’t be able to bid successfully on a job unless you have a bid bond in place. Jobs for federal, state or local government usually require bid bonds as a legal requirement. Private contracts are normally at the project owner’s discretion, but many still require a bid bond to ensure they don’t end up losing money. Another important thing to note about bid bonds is that obligees are often looking for a promise that performance bonds and payment bonds will also be taken out once the contract has been signed and work is to begin. Bid bonds exist to protect everyone involved in a work contract, but they also make it easier for you to bid successfully on the work that you want. A bid bond helps a project owner to screen bidders and veto those that are unqualified, so having a bid bond is vital if you want to secure work successfully.

How Does a Bid Bond Work?

Understanding how a bid bond works is essential if you want to understand how they can benefit your company. The bid bond guarantees that you will enter into a contract if you are chosen to complete the work for a project. It also serves as a promise that you will have performance and payment bonds while doing the work. An average bid bond amount is 10% of the estimated value of the project, although federal projects require it to be 20%. If the contractor can no longer enter into the contract after being chosen, the project owner can claim either the full penal sum of the bond or the difference between the bid and the next lowest bid.

When you use a surety bond company such as Pinnacle, we act as a licensed and independent third party. A professional surety insurance company is there to protect both parties involved in the way that other methods, such as a cash deposit, don’t. Using a bonding company shows that your company is qualified to fulfill the contract that you’re looking for and ensures you have a professional underwriting process to put everything in place.

The Importance of Being Timely

Expedited Bid Bonds

Time is money in business. The longer it takes to get things done, the less money you could make. When it comes to bidding for contracts, you need to move quickly, or you won’t be able to get your bid in on time. However, if having a bid bond in place is essential to help you secure work, you need to be able to get one quickly. Pinnacle Surety makes it quick and painless to apply for bid bonds with our expedited bid bonds process. With a focus on surety bonds, we offer a turnaround within 24 hours for bond program pre-qualifications and bid bond approvals. We make it easy for you to get started so that you don’t have to deal with delays and can bid for and sign contracts as quickly as possible. You can get started online by asking for a quote and avoid wasting time when you could be securing work.

The Promise of Further Bonds

When you secure a bid bond, project owners also want to know that you are going to later secure performance bonds and payment bonds for the project. This is part of what the bid bond promises them so that they know you can also carry out the work to the standard that you promise. A performance bond, also referred to as a maintenance bond, warranty, supply, contract or completion bond is intended to act as a promise that you will carry out the work within the time allowed and to the agreed price. A payment bond is there to ensure that any subcontractors, laborers or suppliers receive payment. If they don’t, they can make a claim against the bond to get the compensation that they are contracted to receive. Both of these bond types serve as protection for the project owner, as well as the contractor.

Get Bid Bonds Faster with Pinnacle

Fast Surety BondsIt’s essential to move quickly without compromising on work quality when you’re bidding for contracts. Working with Pinnacle Surety, you can get everything done quickly so that no one has to wait around. Our expedited bid bonds make it easy to win contracts and get everything into place. Our focus on surety bonds means you can come to us for performance and payment bonds too, allowing you to get everything from one place.

Find Out More About Pinnacle Bid Bonds

If you need to know more about bid bonds from Pinnacle Surety and how we can help you, read the information on our website and our blog posts to discover everything you need to know. Take a look at our case studies to find real-life examples of how our bid bonds can work for you. If you have any questions or need to know more, you can get in touch. A member of our team would be happy to help you.