FOR ALL YOUR SURETY BOND NEEDS.
These surety bonds are general for all states.
Learn more about supply bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
Supply bonds are a type of contract bond that guarantees that a supplier will fulfill purchase orders and deliver supplies/materials in a timely manner. Many construction contracts, especially public works contracts and larger private contracts, require these bonds to help ensure that the project will be completed with no delays or financial complications due to non-delivery of supplies. The bond provides financial protection for project owners as well as for the taxpayers and investors whose money is funding a project.
Suppliers are often required by project owners to purchase a supply bond in order to receive a purchase order. The bonds may be specified in both public and private construction contracts to ensure timely fulfillment of purchase orders. They are required by law for federal construction projects of $100,000 or more, but many state and local agencies have adopted similar requirements, even for smaller projects.
There are always three parties involved in a surety bond. These include the obligee, the principal, and the surety:
A supply bond covers only the delivery of materials, not their installation. If a supplier does not make delivery within the contractually allotted period the obligee can file a claim against the bond. The surety will investigate any claim to make sure that it is valid and will pay the amount of the claim to the obligee. The supplier is ultimately responsible for reimbursing the surety for payments made to claimants.
The primary cost factor is the size of the contract. The surety establishes the premium rate based on each applicant’s personal and business financial condition as indicated by the owner’s personal credit score, the length of time the business has been in operation, and business financial statements.
The bond premium rate is lowest for applicants with good credit and financial stability, usually 1%-3% of the bond amount. Poor credit doesn’t necessarily mean you can’t get a surety bond, but you’ll pay a higher premium rate, and not everyone will be approved.
Use our convenient online system to apply for a supply bond today.
