Category Archives: Bid bond

surety bond in New Jersey

Contractors: Choose Your Insurance Agency Carefully

In your work as a contractor, almost every job you take on will require the issuance of a surety bond in New Jersey. To beat the competition, you need ready access to these bonds, quickly and easily, without delays or overpayment. This is where your insurance specialist comes in.

Why You Need a Bond Specialist

Sometimes contractors mistakenly choose an insurance agency where contract surety bonds are only written as a sideline business. The harm in this is that the agent just doesn’t have the in-depth knowledge to handle these bonds, which can result in delays in issuance. The agency also might not have access to a variety of surety bond insurance carriers, since, as a sideline business, the agency will be unable to provide a large enough volume of business to suit most insurance underwriters. This can result in the contractor overpaying.

What to Look for in Choosing Your Insurance Bond Specialist

When setting up a relationship with an insurance agency, look for the following characteristics that will help ensure your success in obtaining the surety bond in New Jersey that you need on a timely basis, and at a fair price:

  • Years of experience in placing contract surety bonds in your area
  • Access to many different insurance carriers so your needs can be customized
  • The agency understands the time-sensitive nature of surety bonds

By lining up the right insurance specialist in advance, you will be adding to the potential success of your contracting business.

surety bond new jersey

Tips for Choosing the Right Surety Bond Provider

If you’re in need of a surety bond in New Jersey for your upcoming construction project, don’t just turn to anyone to get the job done. While these bonds are fairly easy to locate, finding a provider who understands your needs as an owner and the requirements of contractors you’ll be working with is well worth the time spent searching. In order to ensure you have everything you need moving forward and that your project’s able to unfold smoothly, look for these qualities in your surety bond provider:

  • Look for providers that specialize in the niche markets you’re working in to ensure you’re getting the professional-know how you need to have the best possible experience.
  • Find a company that has a long history with creating surety bonds. This means that they have a great deal of experience with handling these sorts of agreements already, which minimizes the likelihood of issues and miscommunications.
  • Put your faith in a provider that’s aware of the time restraints and other serious variables that are crucial throughout the writing process. This increases the likelihood of you getting the information you need when you need it most.

These are just a few qualities you can look for when selecting your company for generating your surety bond in New Jersey you need for your next construction project. Weeding out the good companies from the bad is easier when you know what exactly to look for.

What is a Bid Bond?

Bid bond

There are many different kinds of bonds; if you or your company regularly bid on projects as part of your day-to-day work activities, it is likely that you have come across bid bonds. This kind of bond exists between the owner—or person requesting bids—and you, the bidder or contractor. Typically, the bond covers anywhere from 5% to 20% of the amount bid.

 

When you bid on a contract, you are competing with other businesses to earn that contract; the lowest bidder is awarded the job. When an owner requires a bid bond, it is for two reasons: first, to prove that you are qualified by a third party bonding company to deliver what is required of you for the project. Having the ability to obtain a performance and payment bond in the event of being awarded the job instills faith in the owner that you are capable of performing as necessary. Second, it ensures that you as the bidder, should the owner select your company to do the work, cannot renegotiate the amount you have bid.

 

As part of the agreement between you and the bid bond company, you agree to forfeit the bond amount if you decide to back out of the deal. Therefore, should the owner select your bid, but for whatever reason you are not able or willing to commit to the terms you initially agreed to, the owner will then call the bond. The amount being called will cover the difference between your bid and the amount of the next lowest bidder.