Surety bonds are an important part of the construction industry in Florida. These bonds protect 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.
In this article, you will learn:
- The 3 types of construction surety bonds in Florida
- How to get a construction surety bond in Florida
- The costs associated with surety bonding in Florida
Types of surety bonds in Florida
The 3 major types of surety bonds used in the construction industry in Florida are:
- Bid Bonds: A bid bond is required as part of the bidding process for some 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 Florida?
If you need a surety bond in Florida, here’s what you need to know:
- Determine the type of surety bond you need from your contract. Florida 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 Florida.
- 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.
How to get same-day surety bonds in Florida?
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 Florida.
How much does it cost to get a surety bond in Florida?
The cost of a contractor surety bond in Florida will depend on the specific type of bond you need and the amount of coverage required. 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 Florida?
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.
How long does it take to get a surety bond in Florida?
The amount of time it takes to get a surety bond in Florida will depend on various factors, including :
- The type of bond you need,
- The amount of coverage required,
- Your personal credit history.
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. Billy Insurance Services can help with the bonding process. Schedule a time to speak to a licensed insurance agent.