When shopping for a Construction Bond in Dallas Texas, the specialists at the Thumann Agency are here to help you customize a plan that works for your business and your budget.
What is a Construction Bond?
A Construction bond, also known as a contractor bond, is a type of surety bond which guarantees that a job will be completed in accordance with the conditions set forth in the contract for that job.
Contractor bonds are usually obtained by construction contractors to guarantee that if a job is not completed or the contractor defaults, the owner of the project will be compensated. Because they are mostly used in the construction industry, these bonds could also be referred as construction bonds.
Such bonds are required on all federal projects above $100,000 and on many state projects. Some private projects also require contractors to obtain contract bonds.
Different bonds are required for the different stages that a construction project goes through. For example, bid bonds are needed at the initial stage when contractors participate in a bid. Bid bonds guarantee that contractors will commence work on the project if they are awarded a bid, and that they will enter at the bid amount. They usually also guarantee that the contractor will post a performance bond when they are awarded the contract.
There are generally three parties involved in a construction bond:
- The investor/project owners, also knows as the obligee
- The party or parties building the project
- The surety company that backs the bond
How Much do Construction Bonds Cost?
How much your construction bond costs depends on the type of bond you are obtaining and the amount of the contract you are obtaining the bond for. Based on this, bond cost is determined by your surety.
The cost of your bond is always a fraction of the full amount of your bond. When determining your rate, sureties consider your personal credit score as one of the indicators of your financial health and stability. For contract bonds in particular, sureties may also request very detailed financial information, especially if the amount of your bond is very high.
How to Get a Contractor Bond
Applying for your contract bond is easy, thanks to our simple application tool. All you need to do is apply online here, and fill in the application form. After we process your application, and depending on the specifics of your case, we may ask you to supply us with additional information or documentation.
If you have any questions which you want to have answered before you apply for your bond, call our bond professionals at (972)-991-9100. Our Team of experts is ready and happy to help you.