Your Guide to Subdivision Bonds
Why do I need a subdivision bond?
If you are heading any type of subdivision construction — from streets and houses to gutters and drainage ditches — a subdivision bond ensures that subdivisions are built according to contract. Before a contractor can begin work on a subdivision project, local government agencies typically require surety bonds to be filed.
To qualify for our construction bonding program, applicants must have a credit score at or above 700. SuretyBonds.com can offer $250,000 of single job limit bonding coverage or $500,000 of aggregate limit bonding coverage.
Pay a Low Rate for Your Subdivision Bond
Your exact surety bond cost will be calculated based on:
- the size of the job at hand and its contractual terms
- the amount of bonding coverage required
- the principal contractor’s work record
- the principal contractor’s credit score
- the principal contractor’s other financial credentials
Premiums are typically calculated at 3% of the bond amount, which would translate to just $3,000 for $100,000 of bonding coverage. The best way to determine what you’ll pay is by getting a free, no-obligation surety bond quote.
Get Your Bond Fast
At SuretyBonds.com, we strive to provide every client with fast, easy and accurate bonding service. Subdivision bonds are incredibly difficult for surety companies to underwrite, so applicants must undergo a thorough application process to ensure financial credibility. If you’re in a rush, rest assured knowing we can fully process subdivision bonds in as little as 2 or 3 business days. And, we also offer an overnight shipping option. Speed up the process by contacting a surety specialist now!
Learn More About Subdivision Surety Bonds
Subdivision projects have represented a significant portion of construction revenue in recent years. As such, surety bonds are required on subdivision projects to ensure everyone is on the same page regarding project expectations. Each subdivision bond that’s issued binds three entities together.
- The obligee is the project owner requiring the bond to ensure the subdivision project is completed according to contract.
- The principal is the contractor who purchases the bond as a guarantee that the subdivision project will be completed.
- The surety is the underwriter that issues the bond, thus guaranteeing that the subdivision project will be completed.
If, for some reason, the contractor fails to complete the subdivision project or breaks the bond terms in another way, harmed parties can make a claim against the bond. If the claim is found to be valid, the surety will provide the harmed party with compensation up to the bond amount. The surety will not assume the loss, however, as it will require the principal to reimburse it for any claims paid.
These bonds also make it possible to file plats with the county or city before the project is completed.