CRS focuses on working with surety bond companies in Los Angeles and Southern California. Private and city/state public works projects require contract surety bonds. Bid bonds are the first step needed to be submitted with your bid before the contractor is awarded the job. The bid bond is usually 10% of the project. The bid bond shows the contractor has the finance to do the work.
Contractors Risk Solutions has worked with time restraints to get the bonds issued to help it clients win and accept projects. CRS works with surety bond companies who write bonds for small projects under $250,000 to over $500,000. Bond rates range from .5% to 5% of the project.
We can get bonds with or without collateral depending on the job and the applicant. Contractors Risk Solutions can help contractors get there contractor license bonds and contract bonds. We are your one stop shop for all of your surety bonds in Los Angeles. CRS focuses on working with surety bond companies in Los Angeles and Southern California.
Private and city/state public works projects require contract surety bonds. Bid bonds are the first step needed to be submitted with your bid before the contractor is awarded the job. The bid bond is usually 10% of the project. The bid bond shows the contractor has the finance to do the work. Contractors Risk Solutions has worked with time restraints to get the bonds issued to help it clients win and accept projects.
CRS works with surety bond companies who write bonds for small projects under $250,000 to over $500,000. Bond rates range from .5% to 5% of the project. We can get bonds with or without collateral depending on the job and the applicant. Contractors Risk Solutions can help contractors get there contractor license bonds and contract bonds. We are your one stop shop for all of your surety bonds in Los Angeles.
Bid Bond
A bid bond is issued as part of a bidding process by the surety to the project owner. The bid bond guarantees that the winning bidder will undertake the contract under the terms at which they bid.
Performance Surety Bond:
This bond guarantees a project’s completion according to the plans and specs. Should the project be abandoned, or the work deemed unacceptable, the existence of a performance bond enables the surety bond company to hire a contractor to complete the project, or settle for damages.Surety bonds for construction may be required in building projects.
When you are bidding a project there will be bond requirements in the bid packet whether you are a new contractor with just a few employees or a big business that employs hundred of workers. CRS can help established companies and new business with their surety bonds. A performance surety bond is akin to a contract between a contractor and the client. When a contractor is awarded a project, a performance surety bond replaces the surety bid bond the contractor purchased to bid on the project.
This new bond ensures the payment of the contract even if the contractor doesn’t finish the project.
Why you need a Performance Bond?
Performance bonds protect both the contractor and the project. With a performance bond, the client can file a claim on the bond if the contractor doesn’t finish the project. If a client files a claim, the client has one of two options: they can either use the bond of the contract or hire another contractor to finish the job.
If a contractor cannot finish the project because of financial losses such as bankruptcy, then the company who issued the surety bond has to pay the client for the losses. (Then in turn, the surety company will collect from the contractor.)
How do I to purchase a Performance Bond?
The contractor purchases a performance bond from a surety bond company. The company will usually ask the following questions: What is the project? How much does the project cost? What is the contractor’s business history? Meaning has the contractor ever not fulfilled a project. And is the contractor financially stable? If the contractor might be close to bankruptcy, the surety bond company probably won’t issue a performance bond.
A performance bond usually costs the contractor between one and five percent of the cost of construction. The federal government on all projects that cost over $100,000 requires performance surety bonds. Once the bond issued, it cannot be withdrawn until completion of the project. If the contractor finishes the contract early, then the client (and only the client) can cancel the bond before the date of completion.Do Your Homework
Do your homework.
If you are a contractor, choose a reputable company that follows the rules and regulations of the federal government when issuing surety bonds. Some companies will offer “the best deal in town” which is usually too good to be true. In order to choose the best surety Bond Company for you, do your research.
Payment Bond
Payment bonds guarantee that any unpaid bills will be paid up to the bond amount, and is required on public projects contracted at more than $25,000. Payment bonds ensure that subcontractors and suppliers are compensated should the original contractor fail to pay them.
SBA Bond:
The SBA bond helps contractors who have a tough time qualifying for a bid bond and performance bond. When applying for a contract bond the bond company may ask for collateral before issuing the bond. The SBA if the applicant qualifies usually will take the risk and not require collateral.
SBA Loan:
When a small business gets an SBA loan to do construction the SBA may require the contractor to have a performance bond to protect the loan. The problem with these bonds is most bond companies don’t bond private projects. Bonding is set up to protect private money not private money. There are many reasons bonding companies don’t like to write these bonds. CRS specializes in finding bonds for these types of project.
Permit Bond:
Many times when getting permits from the city you may be required to get a bond in place before the city issues the requested permit. Here are some examples of permit bonds that may be required:
Excavation bond
Improvement bond
Developer bonds
Subdivision bonds
Completion Bond
Site improvement bond
Public Works Bonds
When working on city or state project contractors are required to have bid bond, payment bond, performance bond and completion bond. Before bidding on a publics works project the contractor will need to set up a line of surety or bond ability prior to bidding on a job. Many times new contractors see a bid they want to bid on but they don’t have bonding set up prior to wanting to bid on the job. The application process to set up your bonding will take about 1 week. The contractor will need to see how much bonding they qualify for before starting the bid process. Find out more about working with public works projects in Los Angeles here.