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Oregon Construction Bond

Contractors and construction companies need to understand how the Oregon construction bond requirements affect their business prospects. This overview touches on the most important details.

What is an Oregon Construction Surety Bond?

This term refers to several different types of contract bonds. Specifically, it refers to bid, performance, payment, and warranty bonds: all or some of which Oregon contractors will need to have before working on public and private-sector building projects. The surety bond holds the bonded party financially accountable if it fails to meet contractual obligations. The bond also provides a mechanism for someone that hires a contractor to seek damages because of performance that falls short of expectations.

How does an Oregon Construction Bond work?

Each kind of contract bond (bid, warranty etc) works a little differently, but the basic mechanism is always the same. When a contractor doesn't meet performance standards established in a contract, the other party in the contract may file a claim against the bond seeking financial compensation equal to the damages caused. As long as the details of the claim are valid, the surety company that issues the bond guarantees payment and then works to collect that same amount (plus interest and fees) from the bonded contractor. Surety companies guarantee payment, but they never accept liability - that always rests with the party named in the claim.

Who should get an Oregon Construction Surety Bond?

All public sector and most private sectors construction projects have a surety bond component - and any contract can include a bond requirement if one party chooses. Since finalizing the contract depends on obtaining the bond, there's no incentive to delay getting a bond. Viking Bond Service is here to make that process easy.

Who are the parties involved in an Oregon Construction Bond?

All types of surety bonds involve three parties:

  • Principal - The contractor required to obtain the bond and pay for any claims.
  • Obligee - The party permitted to file claims against the bond seeking compensation.
  • Surety - The company that issues the bond to the principal and backs the payments to the obligee.

How much does an Oregon Construction Surety Bond cost?

The cost is a small percentage of the required bond amount - eg. the total dollar amount the surety agrees to pay to settle claims. The exact bond cost (called the premium) varies by applicant. Costs depend on an applicant's credit score, financial history, and business record. People with bad credit will pay more since they represent a higher risk to the surety company - but they won't necessarily be denied. Work with Viking Bond Service to meet Oregon construction bond requirements regardless of your credit.

How are claims handled for Oregon Construction Bond?

The surety company investigates claims, rejects those that don't hold up and settles those that do. Like a credit card, the surety company only issues payment, it does not accept liability. That always rests with the bonded party - the contractor responsible for causing the claim in the first place. Whenever the surety settles a claim, the principal must pay that debt back with interest and fees added.

How to apply for an Oregon Construction Contractor's Bond?

It's simpler than you think. Contact us for the application that best fits your bond request. You will also need to consent to a credit check, provide a copy of the specific bond requirements, and turn over any other documents the underwriters require. Receive a bond quote in as little as 24 hours when you partner with Viking Bond Service.

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If you need more information, speak to one of our bond experts by calling 1-888-278-7389, or use the contact form on this page. We have provided fast and affordable bonding to thousands or clients and will be happy to work with you as well.

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