What are Permit Bonds?
Permit bonds are required by certain governmental entities to allow various types of contractors (i.e. Electricians, Plumbers, Roofers etc.) to apply for a permit for a construction project. In most instances when a permit is required, they also generally require to the contractor to meet a minimum general liability insurance requirements before they issue a contractor a permit to proceed with their construction project.
What is the Cost of a Permit Bond?
The cost of required permit bonds vary by the amount of the bond required. The typical cost of a permit bond is anywhere from $100 to $250. The cost of this bond varies from State to State. In almost all cases, the cost of the bond is $100.
Another major component of the cost of the bond is the credit of the person applying for the bond. In most cases there is no credit check for permit bonds. If there is a credit check required, the price difference for contractors with good credit versus those with bad credit is staggering. An example, is the Ohio permit bond for General Contractors in some Cities. A contractor with good credit can obtain this bond for around $100 for the year. On the other hand a contractor with bad credit will have to pay at least $1,000 a year for the same bond. In certain States some companies do not require a credit check to issue permit bonds, so it is always best to check with the professionals at UnitedSuretyBonds.com for a free quote. Good credit as defined by most bonding companies is a credit score above 700, no bankruptcy in last 7 years and no unresolved claims against previously issued bonds.
Again the requirements for these permit bonds vary between $5,000 and $25,000, with $10,000 bonds being the most common. The cost of these bonds are usually $100, but can can be slightly more for larger amounts. Additionally, most municipalities have their own bond form that they require. A frequently asked question we get at UnitedSureyBonds.com is “Do I need to get a new bond for each municipality or can I use the same bond?” The answer is you need a new bond for each municipality that requires a bond.
How Long Will it Take to Get Processed?
Another major concern that contractors have about getting a permit bond is how long will it take to get processed. In all situations where the contractors credit is “good” as defined above or no credit check is required the bonds can be issued immediately. These permit bonds are in most cases electronically sealed and can be emailed directly to the contractor for their signature. In some cases an actual signature and seal is required from the Bond company and in that case the bond can be delivered the next day by Fedex or regular mail if time allows.
UnitedSuretyBonds.com can take a check or credit card over the phone to collect payment for the permit bond.
If you have any other questions that were not answered here or any bonding questions in general please call Thomas Hester of UnitedSuretyBonds.Com at 312-878-2372 or e-mail at TOM@FARMERBROWN.COM.
Remember, all we do at UnitedSuretyBonds.com is write bonds for contractors like you.