Home / Construction Bond California

California Construction Bond

Construction projects in California often require contractors to obtain specific types of surety bonds before they're awarded a bid or allowed to start any work. If you're involved with construction in any way, it's critical to know when, where, why, and how surety bond requirements affect your business. This page covers the basics.

What is a Construction Bond in California?

To start, it's a form of contract bond. All contact bonds hold the bonded party (in this case the contractor performing the construction work) responsible if he or she fails to meet the terms of the contract. Many construction contracts include a bond requirement as a way to hold contractors responsible for their actions and ensure the other parties in the contract can seek justice in the form of financial compensation.

How does a California Construction Bond work?

If a contractor or construction company doesn't meet contractual obligations - to finish on time, pay everyone properly, stay within budget etc - the party that hired them may file a claim against the surety bond. The surety company that issues the bond agrees to settle all valid claims, but they're only an intermediary. After paying, the surety will attempt to collect the amount of the settlement from the bonded contractor that bears liability under the terms of the bond agreement.

Who should get a California Construction Surety Bond?

Anyone required to do so before being awarded a construction contract. Bond requirements are often non-negotiable, so when one exists, there's no reason to delay getting a bond. Work with Viking Bond Service to get a quote in as little as 24 hours.

Who are the parties involved in a Construction Bond in California?

Every bond agreement includes three distinct parties:

• The Principal - The contractor required to obtain a bond. By getting bonded, the principal also accepts responsibility for paying all valid claims.
• The Obligee - The person or party able to seek damages by filing a claim against the bond.
• The Surety - The company that issues the bond and pays for claims when the principal refuses. The principal must always pay the surety back for any claims it settles.

How much does a California Construction Performance Bond cost?

That depends first on the scale of the construction project, which will determine how large the bond must be - eg. $25,000 or $250,000. The cost is a small percentage of the total amount, but the specific cost of the surety bond depends on the bond applicant's credit and financial background. Bad credit doesn't have to disqualify someone from getting a construction bond in California, but it will mean paying slightly more.

How are claims handled for California Construction Surety Bond?

As long as a claim proves true after undergoing a thorough investigation, the surety company settles it without further delay. Since the principal has responsibility for all claims, that party must pay the surety back the full amount of the settlement along with interest, fees, and costs associated with the investigation.

How to apply for a Construction Bond in California?

It's a quick and simple process when you work with Viking Bond Service. Contact our agents to get the correct application for your specific request, consent to a credit check, and provide any other paperwork the underwriters ask for. You will get a quote for the bond premium back quickly, and once you pay the bond requirement is satisfied.

Viking Bond Service - Great Service for California Contractors

Bonds shouldn't hold your business back. Get the bonds you need at competitive rates. Get the process started or get more information first; Call us at 1-888-278-7389 or send your questions through the contact form on this page.