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Supply Bonds

Supply Bonds

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.

Supply Contract Bonds—Viking Bond Service

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.

Supply Bonds Explained:

What is a Supply Bond?

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.

What Parties are Involved with a Supply Bond?

A supply contract bond needs three parties:

  • The surety who will underwrite the surety bond
  • The obligee who requires that a bond is purchased
  • The principal who is the supplier of the materials

How are Supply Bonds Obtained?

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.

How much do Supply Bonds Cost?

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.

Get your supply bond with Viking Bond Service

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!

Request a Supply Bond Quote:

  • Call us at 1-888-278-7389.
  • OR
  • Complete the contact form on the page. One of our agents will contact you shortly.

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Performance Bond processing is typically more involved than Commercial but they still work basically the same. Learn about how Performance Bonds work.

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