Allstar Surety bid bonds serve as a security, and a prequalification measure for a contractor’s bid during a bidding process. Often, on most construction projects bids that are not backed by a bond are not accepted.
Once a contractor has been awarded a bid, the bond guarantees that the contract will be executed at the bid price and under the conditions set forth in the bid. In this sense, bid bonds work like all other surety bonds as agreements made between three parties. The obligee is the party requesting the bond (the project owner or the state), the principal is the party obtaining the bond (the contractor participating in the bid) and the surety bond company is the party issuing the bond, which is also responsible for its financial backing.
Bid bonds are important as an additional guarantee for owners, ensuring that bidding contractors or subcontractors are qualified to execute the job they are bidding on. Allstar Surety performs checks on contractors before issuing contract bonds, project histories, credit scores, financial standing, and other aspects of the company are thoroughly reviewed before a bond is issued.
The surety underwriters at Allstar Surety will also write the performance and payment bonds for a job that is being bidded on. Your contractors can benefit from working with Allstar Surety as a guarantee of the contractors’ business and quality of workmanship.
Allstar Surety provides bid bonds to contractors of all credit types. Contact a Surety expert today to learn more.