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A bid bond gives a guarantee that the bid that has been submitted for a project is accurate.
Bid bonds cost differ depending how big the contract, for example for smaller contracts within 350k and under usually cost around $100 each or $250 for unlimited bonds for the year.
Where can you get bid bonds?
Another reason why contractors and owners like using bid bond are that it gives an idea that the bidding contractor is supported by the financial backing of a surety company and they are qualified enough to complete the project.
The first thing to bid on a project or a public job you must be able to get a bid bond, which means that the bid you submit is accurate and that the surety company will then write a performance once you are awarded the job.
First, you will need to send a bid invitation letter to your bond agency, with the bid bond request form and the job specification that you get from the obligee for all the bid bond claims.
Construction Bid Bonds claims can put you at risk
You are responsible for paying the claims of the bond fully, which could be the full amount of the bond which includes the legal costs.
The agreement which you must sign to get your bond bid legal which pledges your corporate and personal assets in an event of a bond claim.
As mentioned above that you are responsible for paying for any bond claims that you cause, which could be very high depending on the bond.
If you need help understanding what your bond guarantees, don’t hesitate and contact a bond professional.
Before filing a bid bond and issue your bid, which will automatically guarantee that the underwriter will agree to file a performance bond if your bid is accepted.
Typical questions asked on a bond bid application:
Before preparing for a bid, make sure that that the project requires a bid bond and if it does, what is the price of the bond.
The Appeal bond isn’t the most common, but some Canadians will stumble across a situation, which requires them to obtain this type of surety bond.
A probate bond is a type of surety bond that acts as an insurance to protect heirs from fraud.
You may initially be against the ideal of spending money on a bond, but you need to understand that the bond is there to provide protection to all parties involved.
In Canada, it is common for construction companies, travel agencies, warehouses, and exporters to obtain a surety bond.
Below you will read about what exactly a surety bond is and who is involved in a surety contract.