Bid Bond

A bid bond is used during the bidding process when bidding on construction contracts to show that the contractor has the financial means to complete the project within the resources that he has bid on. When a project owner, whether it is federal or private, opens a project for bidding by contractors, it would be too expensive and labor intensive for the project owner to investigate each bidder to ensure that each bidder is financially secure enough to complete the project within the bid that they placed. As such, by relying on a bid bond company instead, they know that if, in fact, the contractor is not able to complete the contractual obligations as agreed upon, the project owner is assured that if the bidder defaults on the project, the project owner will not be left with a project left undone and no way to resolve the issue.

That is where the bid bond company will step in and help resolve matters. Should the project owner have to decide to cancel the contract with the lowest bidder due to issues with non-performance and then go with the second lowest bidder, the bid bond company would then cover the costs between the two bids and any related costs. The bid bond company may also sue the contractor that they had originally bonded to recoup those costs, depending on the initial contract between the bonding company and the contractor. The bid bond company usually, however, does credit checks and financial reviews of companies that they consider for bonding before they agree to bond to limit the risks of such actions.

 

 


Application for


Current or expiring quote we are looking to beat:


Name of previous surety company writing to the bond:


Section I: Bond Applied for

Type of Bond

Effective Date

Expiration Date


Type of Company

CORP

LLC

DBA

Partnership

Bond Amount


(Obligee)


Obligee Address


Section II: General Information

Applicant's Name

Spouse Name


SS#

Spouse SS#

Home Phone


Residence Address

City

State

Zip


Status of Residency

Own

Rent

At Current Address Since


Date of Birth

Spouse Date of Birth

Business License Number


Business Name


Business Phone

Business Fax

Business Email


Business Address

City

State

Zip


Date Business BEGAN Under Present Individual or Firm Name

Business Tax ID


Has any company refused to issue bonds for any purpose?

Yes

No

Do you have any liens, claims or judgements against you?

Yes

No


Has applicant ever failed in business?

Yes

No

Has applicant filed bankruptcy in the last 10 years?

Yes

No


If yes, Chapter 7?

Yes

No

Chapter 11?

Yes

No

Chapter 13?

Yes

No


Date Filed for Bankruptcy?


Date of Discharge?


If yes to any, please explain:


Section III: Additional Parties

Name

Spouse Name


SS#

Spouse SS#

Home Phone


Home Address

City

State

Zip


Personal Financials

(if more than one owner, each has to fill out this app)

Statement of assets and liabilities as of


Assets Liabilities
Cash in Bank Notes Payable to Banks
Cash on Hand Notes to Others(excl. of equipment)
Stocks and Bonds Accounts Payable
Accounts Receivable Federal and State Income Tax Due
Notes Receivable All Other Taxes
Inventory Accruals, Payrolls, Etc.
Cash Value Life Insurance    
Equipment Due on Equipment
Real Estate Due on Real Estate
Other Assets Other Liabilities
    Surplus and Undivided Profits
    Capital Stock(if a corporation)
       
Total Assets Total Liabilities

Net Worth


Name of Owners

Name and Title of Officers

% of Ownership


Are you an insurance agent?

Yes

No

Agent License #

Agent State

Completion of this form constitutes permission for Cal Society Insurance Services to obtain customer information which will be used to determine bonding eligibility. This information will be held in the strictest confidence.