Supply bonds are a type of contract bond that provide a guarantee that a supplier will deliver the promised materials. A supply bond does not cover any labor costs and is simply used to ensure that the required materials are delivered according to the terms of the contract.
Viking Bond Service has many years of experience working with contract bonds. If you’re a supplier looking for a supply contract bond we can help! Our efficient and friendly team will make the process of applying for the necessary supply bond easy and understandable. We’ve outlined some of the key information about supply bonds below.
A supply bond is a guarantee that a supplier will deliver the materials outlined in a contract. If the supplier fails to deliver the goods then the bond provider will be required to pay for the cost of the missing materials. Supply bonds give financial protection to the purchaser of the materials ensuring that they either receive the goods, or receive financial reimbursement if the goods aren’t delivered within the time and quality constraints defined in the contract. Supply contract bonds can be required by state or federal law for some projects.
A supply contract bond needs three parties:
To obtain a supply bond you’ll need to submit an application form to a bonding company. You’ll also need to include additional supporting documentation that helps the bonding company gauge the financial stability of your business. You’ll be provided with a list of the documents that you’ll need to submit. These usually include business financial statements, proof of insurance, a business resume and your own credit score information. You’ll then be provided with a quote for the cost of the bond. Once you’ve signed all of the necessary paperwork and submitted your payment you’ll be provided with they supply bond.
The cost of a supply contract bond is not fixed. A surety bond company will use the information you provide in your application to determine what they think is the appropriate bond premium. Bond costs are lower if your business is considered a low risk, in other words the bonding company does not expect to have to pay out on a claim against your bond. Your risk factor is calculated using the financial strength and credit history of your business, and your personal credit score. People with low credit scores are still able to get supply bonds but can expect to pay a higher premium.
Viking Bond Service has many years of experience securing supply bonds. Our friendly and efficient team make getting the bond you need quick and easy. Call or email us to request your supply bond quote. We aim to process all requests within 24 hours!
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