What is a Payment Bond?
A Payment bond is a financial guarantee within the construction industry. These bonds are typically coupled together with a Performance Bond. A Payment Bond is a guarantee that you will pay any sub-contracted employees, hired laborers, or material supply companies in full and on time.
How does a Payment Bond Work?
A Payment Bond is typically part of what is called a Performance and Payment Bond obligation. The General Contractor typically hires general labor, skilled contractors, and purchases supplies most of the time on credit. If the Contractor completes the job, this bond guarantees that all labor, specialty contractors, and material suppliers are paid and their contracts are fulfilled. Should a Contractor default, the surety carrier would pay the laborers, sub-contractors, and suppliers then ultimately go back to the Contractor for repayment.
How much does a Payment Bond Cost?
The cost of this type of bond is based on the bond amount required by the project owner from whom the bond is required. The amount of the bond is determined typically through a bidding process. A big factor in pricing is determined by the specific job specifications, completion costs, corporate financials and the personal credit report of all owners and spouses. Someone with good credit may pay a lesser premium than a person with poor credit. However, just because someone has poor credit does not mean we cannot help you. At Universal Service Agency, we strive to find our clients the best rates with the strongest rated carriers to insure you are getting the best bond coverage available.
How do I get a Bid bond?
You can get Payment Bonds by contacting surety bond agents/brokers. Since you’re already here, you can give us a call at 215-646-2400 or Apply Now here.
How to Choose a Bonding Company?
Universal Service Agency offers Surety Service Made Simple. We are the fastest surety only agency in the country, with over 100 years of combined surety experience servicing all 50 states. We exhaust all of our resources to get you the fastest turnaround times and lowest rates. We can help anyone, even clients that may not fit into the standard market. You can get a free quote here or call our bond experts at 215-646-2400.
How long does it take to get a Payment Bond?
Universal can issue bonds the same day an application is received. The amount of time between application and issuance is affected by a number of factors though, including but not limited to, the size of the obligation, the type of bond, and promptness of the premium payment.
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Universal Service Agency is the fastest “surety only” agency in the country, with over 100 years of combined surety experience servicing all 50 states.