Texas Bid Bond
Contractors and construction companies across the Lone Star State rely on Texas bid bonds to secure work contracts. Therefore, it's vital to understand how this type of surety bond works. We've outlined all the details below.
What is a Texas Bid Bond?
A Texas bid bond protects against the risk that a contractor or construction company will win a bid to complete a job then pull out of the bid before starting work - causing expensive disruptions in the process. When this happens, bid bonds in Texas provide a way for the injured party to receive damages in the form of financial compensation.
How does a Bid Bond work in Texas?
When someone with a Texas bid bond pulls out of a bid for any reason, the party that hired them may file a claim for damages. The surety that backs the surety bond guarantees payment for all valid claims. The bonded party (eg. the contactor) must pay the surety back for any claims it settles.
What is the purpose of a Bid Bond?
A Texas bid bond discourages someone from bidding on a job they can't complete by holding them accountable should they back out. Bid bond requirements give project owners confidence that they're hiring reputable contractors. And if they prove less reputable than expected, bid bonds in Texas provide a way to recoup losses. That's why many jobs require a bond of anyone who bids.
Why get a Bid Bond?
Many project owners require someone to prove they have a surety bond before they're allowed to submit a bid. There's no way around this requirement. If you intend to submit a bid, seek out a Texas bid bond ASAP. Viking Bond Services has resources to get you bonded fast.
How Much Does a Texas Bid Bond Cost?
Someone who needs a Texas bid bond typically needs a Texas performance bond at the same time. A surety agency may offer the bid bond for free as long as the bond seeker pays for the performance bond, which will cost a small percentage of the bond total. If there is a Texas bid bond cost, it's nominal.
Who are the parties involved in a Bid Bond?
Anyone required under contact to get a Texas bid bond will need to show proof they have one before submitting bids for work. A surety bond contract involves three parties:
- Principal - The contactor seeking the bond. The principal bears financial liability for all claims submitted against the bond.
- Obligee - The party hiring the contactor. If that contactor backs out of a bid, the obligee may file a claim against the bond seeking damages.
- Surety - The surety agency that issues the bond and pays out claims. When the surety pays the obligee, the principal must pay that debt back in full.
How to get a Bid Bond in Texas?
To apply, contact us to get the best application suited to your specific contract; submit the completed bond application along with a copy of the bond requirement. A credit check is also necessary, and the surety may request additional documentation. When you apply for a Texas bid bond with Viking Bond Service, expect to get a quote back within 24 hours.
Get a Texas Bid Bond from Viking Bond Service
We work with many contractors and construction companies across Texas. Viking Bond Service is a preferred surety agency because we make the bonding process fast, simple, and affordable. We also offer stellar service. Contact us with questions at 1-888-278-7389, or use the contact from on this page.
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