Surety bonds are an important part of the construction industry in Arkansas, providing protection for project owners, general contractors, subcontractors, and suppliers. Surety bonds ensure that contractors will fulfill their obligations and complete their work according to the terms of their contracts.
Types of surety bonds in Arkansas
There are 3 major types of surety bonds used in the construction industry in Arkansas:
- Bid Bonds: A bid bond is a type of surety bond typically required as part of the bidding process for construction projects. It is intended to guarantee the project owner that, if the bidder is awarded the contract, they will enter into a formal contract and provide the necessary performance and payment bonds.
- Performance Bonds: A performance bond is intended to guarantee the project owner that the contractor will complete the project by the terms and conditions of the contract. If the contractor fails to complete the project as required, the project owner can claim the performance bond to recover any damages or losses resulting from the contractor’s failure.
- Payment Bonds: A payment bond is intended to guarantee subcontractors and suppliers will be paid for the work they perform or materials they provide under the contract. If the general contractor fails to pay them as required, the subcontractors and suppliers can claim the payment bond to recover the unpaid amounts.
Where to get a surety bond in Arkansas?
If you need a surety bond in Arkansas, here’s what you need to know:
- Determine the type of surety bond you need from your contract. Arkansas requires different types of surety bonds for different industries and purposes.
- Obtain a bond application. Most surety bond companies will have a bond application you can fill out online or download and submit by mail. Be prepared to provide financial information about the project and details about your business. Contractors can quickly obtain surety bonds from Billy Insurance in Arkansas.
- Pay the premium and obtain the bond. Once the bond application is approved, you’ll need to pay the premium and receive the bond. Keeping the bond safe is essential, as you may need to present it to authorities or customers.
Same Day Service?
You can obtain same-day surety bonds from Billy Insurance Services and your certificate of insurance. Billy provides a variety of surety bonds, including contractor license bonds, bid bonds, and performance and payment bonds. We service contractors in several locations throughout Arkansas. It’s important to note that the availability of same-day surety bonds may depend on the specific type of bond you need and your circumstances. It’s a good idea to call around to a few different companies to see what options are available.
How much does it cost to get a surety bond in Arkansas?
The cost of a contractor surety bond in Arkansas will depend on the specific type of bond you need and the amount of coverage required. Contractor surety bonds are typically required for a specific project, and the bond amount is often based on the project’s total value. In general, the premium for a contractor surety bond ranges from 1-15% of the total bond amount.
For example, if you are bidding on a construction project valued at $500,000 and need a bid bond, the bond amount may be set at 10% or $50,000. If the premium for the bond is 5%, the cost of the bond would be $2,500. If the premium is 10%, the cost would be $5,000.
Can i get a surety bond with bad credit in Arkansas?
It’s important to note that the premium for a contractor surety bond may be affected by your personal credit history. If you have a strong credit score, you may be able to secure a lower premium. On the other hand, if you have a poor credit history, you may have to pay a higher premium to obtain a bond.
How long does it take to get a surety bond in Arkansas?
The amount of time it takes to get a surety bond in Arkansas will depend on various factors, including the type of bond you need, the amount of coverage required, and your personal credit history. Depending on the specific circumstances, it can generally take anywhere from a few hours to a few days to obtain a surety bond.
If you need a surety bond on short notice, it may be possible to get a bond the same day by working with Billy Insurance Services, a company that specializes in providing same-day bonds.
If you have time to plan ahead, starting the bonding process as early as possible is a good idea to allow sufficient time for the bond to be issued. This will give you the opportunity to shop around and compare quotes from different surety bond companies. Overall, the time it takes to get a surety bond in Arkansas will depend on your circumstances and the specific bond requirements you need.
Billy Insurance Services can help with the bonding process. Schedule a time to speak to a licensed insurance agent.