Encroachment Surety Bond
If you plan to build a cell phone tower, billboard, fence, or other structure on private property that is directly adjacent to public land, you may need to obtain an encroachment surety bond first. Failure to abide by the encroachment surety bond requirements can seriously jeopardize the progress of building projects, making it essential to understand this surety bond type and acquire one in a timely manner. This page has all the info you need to know.
What is an Encroachment Surety Bond?
An encroachment surety bond holds a contractor accountable for building projects that violate state laws relevant to encroachments. A contractor must obtain one of these bonds with a minimum amount of coverage (requirements vary by state) before beginning to build.
Later, if the state determines that any part of the project is illegal, it may file a claim against the bond for compensation equal to the damages caused. The surety bond company that issues and underwrites the bond will first investigate the claim. Provided that all the details of the claim have merit, the contractor must immediately pay to settle the claim in full.
In the event that a contractor does not settle, the surety bond company will pay a settlement to the claimant. Valid claims are guaranteed a settlement. Since the bond holder (The contractor) has liability for all claims, however, they must repay the surety the full settlement amount, including interest and fees. Legal action and loss of bond coverage could result from a debt to the surety that remains unpaid.
Who Needs to Obtain an Encroachment Surety Bond?
Though every state handles encroachments differently, generally, any contractor hired to build on private property adjacent to public land needs an encroachment bond before the project begins. This is one of many different construction bonds a contractor may need.
Encroachment Surety Bond Cost
The cost of a surety bond is based on several factors, beginning with the required amount of coverage. Encroachment bond requirements are unique to each state, but many states require bonds to have $100,000 of coverage. Contractors will only pay a small percentage of the coverage total to acquire the bond. The final cost depends on the bond seeker's credit score, financial history, and possibly their work history as well. Those with bad credit or a history of bond claims will pay more for the bond. Viking Bond Service offers a special program to help people get approved for the surety bonds they need at fair rates, regardless of their credit.
How to Get an Encroachment Surety Bond
Getting an encroachment bond starts with a simple application process. The surety bond company will ask you to provide a completed bond application, permission to run a credit check, and (possibly) additional documentation, such as a financial statement or work history. Upon receiving the application materials, the surety bond company will quote a price for the bond premium. Paying the premium activates the bond coverage, at which time the surety will provide documentation proving the encroachment bond requirements have been met.
Encroachment Surety Bonds From Viking Bond Service
Viking Bond Service can help you get an encroachment bond in all 50 states. And thanks to our fast and fair process, getting a bond could not be easier. How much would your bond cost? Request a quote to find out. It costs nothing and comes with no obligation. Have questions for our bond experts? Contact us or call 1-888-2-SURETY (1-888-278-7389).
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