Surety Bonds 101

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Surety Bonds 101

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Title: Surety Bonds 101 Author: Jason Huntsman Last modified by: Pam D'Amico Created Date: 5/25/2006 2:06:37 PM Document presentation format: On-screen Show – PowerPoint PPT presentation

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Title: Surety Bonds 101

1
Surety Bonds101

The Basics of Bonding

2
What is Surety Bonding?
3
Types of Surety Bonds

Bid Bond
Performance Bond
Payment Bond

4
Types of Surety Bonds

Bid Bond
Performance Bond
Payment Bond

5
Types of Surety Bonds

Bid Bond
Performance Bond
Payment Bond

6
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
7
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
8
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
9
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
10
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
11
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
12
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
13
Prequalification
Capacity
Financial Strength
Company History
Organization
Continuation Plans
References
Work In progress
14
Surety Company Checklist

Good character
Experience matching contract requirements
Financial strength
Excellent credit history
Banking relationship
Line of credit
Necessary equipment

15
Benefits of Bonds
Financial Security
Construction Assurance
16
Functions of Bonds

No liens
Smooth transition from construction to permanent
financing
Provide support to contractor
Project completion

Surety Bonds
17
Cost of Surety Bonds

Bid Bond No charge
Performance Bond ½ - 2 of contract price
Payment Bond Price included with performance bond
18
Example Surety Bond Rates

Project Amount Approx. Bond Premium
1 Million 7,700 13,500
5 Million 33,200 47,250
10 Million 56,950 81,000
20 Million 101,950 146,000
Premiums may vary depending on size, type contractors bonding capacity. Premiums may vary depending on size, type contractors bonding capacity.
19
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