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Site Improvement Bond

If you plan to make improvements to an existing site, you may need to obtain a site improvement bond (also sometimes known as an off site improvement bond). When required, a project can't proceed without one. Don't let bonding issues hold back your business opportunities. Use this guide to learn the basics of site improvement bonds.

What is a Site Improvement Bond?

Before a landowner can make improvements - upgrading access, improving drainage, extending sidewalks etc - to a subdivision or commercial property that has already been built, they may be required by law to obtain a site improvement bond. This specific type of surety bond works similar to a subdivision bond, except it applies to existing rather than new construction. Like all surety bonds, this one makes the bonded party financially accountable for any aspect of the site improvement that doesn't meet the standards prescribed in the governing regulations.

How does a Site Improvement Bond work?

If a site improvement falls short of expectations - because the work is over deadline, over budget, below quality standards etc - the governing agency may file a claim against the surety bond. As long as the claim is true, the surety company that underwrites the bond agrees to either pay in full or take steps to complete the improvement work, whichever the surety bond dictates. However, the surety company does not accept the final financial responsibility for settling the claim - they simply act like a line of credit. The bonded party, meaning the landowner who did not complete the improvements as agreed, has financial responsibility for all claims and must pay the surety back whatever amount expended settling the claim.

Who should get a Site Improvement Bond?

Landowners seeking to expand or improve an existing site may be required to obtain this bond. The bond requirement will be made clear by the governing agency authorized to approve the site construction. When it becomes apparent that a site improvement bond is required, seek out a bond immediately from a company that can get you approved fast and provide all the resources you need in house - a company like Viking Bond Service.

Who are the parties involved in a Site Improvement Bond?

Site improvement surety bond agreements involved three parties:

  • Principal - The landowner that obtains the surety bond and accepts financial responsibility for claims filed against it.
  • Obligee - The governing agency that approves construction plans, outlines the surety bond requirements and has the right to file claims against the surety bond if those requirements aren't met.
  • Surety - The company that issues the surety bond to the principal and pays the obligee following a claim. When the surety settles a claim, it has the right to use whatever legal means necessary to collect the debt from the principal.

How much does a Site Improvement Bond cost?

That cost of a site improvement surety bond depends on the value of the bond - eg. the maximum amount the surety commits to paying to settle claims. The amount of the surety bond relates to the value of the site improvements, and the cost is a small fraction of that amount. The exact cost of the surety bond depends on the bond applicant's credit history and business history. Someone with a low credit score will pay a larger premium. However, with the help of Viking Bond Service, they won't necessarily be denied, even if other surety companies have said no. Take advantage of our bad credit surety bond program to overcome this common obstacle.

How are claims handled for Site Improvement Bond?

The surety investigates every claim thoroughly before issuing (or denying) payment. Investigations establish whether the site improvements truly had the problems detailed in the claim. If so, the surety settles the claim with the obligee without any further delay. However, since the principal has final financial responsibility for these claims, they must pay the surety back.

How to apply for a Site Improvement Bond?

You will need to submit a surety bond application specific to this bond type, submit to a credit check, and turn over any additional documentation requested by the surety company. When you apply with Viking Bond Service, expect to get a quote back within 48 hours. Once you pay the premium, the surety bond goes into effect and your bonding requirements are fully satisfied.

Get the Project Started With Viking Bond Service

Whether you need a site improvement bond just once or quite often, you want to have a great surety bond provider on your side. That's why so many of our clients - in all 50 states - work with Viking Bond Service exclusively. Take advantage of our in-depth service and in-house expertise by contacting us at 1-888-278-7389. You can also submit questions through the form on this page. Contact us to get the ball rolling today.

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