Site Improvement Bonding Guide
SuretyBonds.com is legally licensed to issue site improvement bonds nationwide. Whether you’re a contractor in Pennsylvania, Colorado, Illinois or Virginia, we can help!
A site improvement bond is a bond required by developers, builders or individual(s) to guarantee successful completion of subdivision work to a public entity. This bond ensures certain improvements will be made to a property as the terms of the projects contract says. The bond is similar to subdivision bonds except that subdivision bonds are for new buildings. Site improvement bonds are required for improvements done on existing sites. These bonds are often required as a condition to getting a construction permit for a specific project. Because there is a lot of information regarding site improvement bonds, the surety experts at SuretyBonds.com developed this quick and easy guide to help make it easier to understand.
To qualify for our construction bonding program, applicants must have a credit score at or above 700.
Learn More About Site Improvement Bonds
Site improvement bonds are different from the typical contract bonds used for construction sites. A key difference with site improvement bonds is that the owner has to pay the cost of building the bonded improvements rather than the public agency. This is also an important point to remember if a general contractor agrees to post the site improvement bond on behalf of the owner. Normally, the general contractor has the contractual right to stop work if the owner does not pay him. However, if the general contractor posts the improvement bonds in favor of the public agency, the contractor is obligated to complete the improvements and pay all the bills regardless of whether the owner/developer paid them.
Each bond that’s issued binds three entities together.
- The obligee is the project owner requiring the bond to limit the potential for loss in case improvements are not made as expected.
- The principal is the contractor who purchases the bond as a guarantee that the appropriate improvements will be made.
- The surety is the underwriter that issues the bond, thus guaranteeing that the appropriate improvements will be made.
Why do I need a site bond?
Site improvement bonds are purchased to protect the project owner (and the owner’s investment) from contract default or other problems that may arise during the construction project.
If the contractor is found to be in breach of contract, a claim can be made on the bond to reimburse the project owner and/or any affected consumers. If a claim is made against the bond, the surety’s claims department will work proactively to resolve issues with the project. If a solution cannot be found, the surety will reimburse the project owner for any losses up to the amount of the bond. However, the contractor will be required to repay the surety for any money lost due to a claim.
Site Improvement Bond Cost
When working with SuretyBonds.com, you get the lowest rate available without any additional brokerage fees. The rate you’ll pay depends on:
- The size of the job at hand and its contractual terms
- The amount of bonding coverage required
- The principal contractor’s time in business and work record
- The principal contractor’s credit score
- Other financial credentials of the principal contractor
The higher your credit score and the stronger your financial credentials, the lower your premium will be. However, don’t worry if you have poor credit. Our surety experts are dedicated to serving all our customers and finding the best rates possible despite their credit score. Find out what you’ll pay by getting a free, no-obligation surety bond price quote!
Apply for a Site Improvement Bond Today!
SuretyBonds.com strives to provide every client with fast, easy and accurate bonding services. These types of bonds require a thorough application process, but you can rest assured knowing SuretyBonds.com can issue a site improvement bond in as little as 2-3 days. We even offer an overnight shipping option to better accommodate contractors who are in a rush. What are you waiting for? Start the process now!