What is a Surety Performance Bond in South Carolina?
Title 38 of the Official Code of Laws of South Carolina Annotated defines surety bonds as Sec.38-5-10. Duty of broker to procure insurance or surety bond; penalties for violation.A person licensed as a bail agent pursuant to Section 40-5-230 must procure a policy of insurance for compensation for his liability in accordance with regulations promulgated by the department and an appropriate surety bond in a form satisfactory to the department for any bail bond he signs or countersigns.
A person who signs a bail bond in accordance with this chapter may not be held liable on the bond unless he has acted within the scope of his authority.
In addition to other penalties provided by law, a person licensed as a bail agent pursuant to Section 40-5-230 who fails or refuses to procure insurance or a surety bond when required by this section shall have his license suspended until such time as he complies with this requirement.
Just how much does a Surety Performance Bond in South Carolina?
As an independent agency, Surety Performance offers the lowest commission rates in the country for any line of insurance. The more lines you buy from us, the lower your cost per line becomes. Additionally, there are no other fees or additional costs associated with this relationship. This is why many companies choose Surety Performance as their single source for all their Insurance needs.
While a small company may have fewer insurance needs than a large company, they still require the same amount of coverage as their larger counterparts. A surety bond is no different from any other line of insurance in that regard, and it doesn’t matter if your company is large or small. In addition, there are several technicalities that would dictate whether your bond requirement can be reduced.
We guarantee our commission rates are lower than any other agent or broker in South Carolina.
The point is, don’t make surety bonds more complicated than they are. Don’t hesitate to call us if you have any questions about the amount of coverage you need for your company.
What’s the process to get a Performance and Payment Bond in South Carolina?
The process to get a Performance and Payment Bond in South Carolina involves the following steps:
- Agree on the terms of the contract with the customer.
- Draw up an agreement between contractor and surety, which is the bonding company you will be dealing with. Make sure it covers everything that was agreed upon in your contract with your customer.
- Get two references from former customers who are not relatives or business partners, but rather people who have done business with you before without any problems along the way. These must reflect at least one year’s worth of work. They may also want to speak with you personally about why they should speak as a reference for you and what kind of work they had seen you do previously.
- Make sure you meet the surety company’s financial requirements for bonding. A good rule of thumb is to make sure your net worth at least equals what you are asking for in bond coverage.
- Once all references have been checked, get your contractor’s license number and social security number available on the application. This information will be run through databases that track criminal activity and work history so it is very important that this information is correct.
- The last step is to sign two copies of an agreement that states how much bond coverage you need when the bond goes into effect and who it applies to (both parties involved). These copies will be sent off to both you and the customer so that both of you are covered. You will be given an original copy of the bond certificate with your surety company’s information on it that must be available at all times to the customer. As long as you can show this, your surety company will fulfill its contract with the customer if work is done correctly and payment is not made in a timely manner.
How to Get a Performance Bond in South Carolina?
The process of obtaining a performance and payment bond varies slightly between states. In addition, there are slight variations in the exact requirements from different surety companies.
However, the general steps listed above are applicable to any state except for perhaps California, where most contracts do not require a bond at all, but rather a certified check upfront even for projects under $100.00! This can be a real challenge for new contractors who have never been bonded before because they don’t have any references or financial history with which to prove their trustworthiness to a bonding company.
Fortunately, there are some ways around the requirement of having references pulled by your surety if you work together with them beforehand. Another option is to go through smaller bonding companies that may not require as much information or money to get bonded. My advice would be to contact as many bonding companies as possible and explain your situation so that they can help you find a solution.
Most larger surety companies will only bond contractors if their net worth is at least $10,000, with most requiring more like $50,000-$100,000 in the bank if not more for big projects. However, there are some options that it’s worth exploring before resorting to using a certified check which is both expensive and time-consuming.
The steps to getting a performance and payment bond in South Carolina are:
1) Agree on terms of the contract with the customer
2) Draw up an agreement between contractor and bonding company
3) Get two references from former customers
4) Meet financial requirements for bond
5) Sign an agreement
6) Give documents to the customer
Where can I get a performance bond in South Carolina?
Any corporation authorized to do business in South Carolina may act as surety on a general or limited contract bond. The surety should be an established business in South Carolina, with at least one officer having a substantial interest in the business.
A bank or trust company authorized to do business in South Carolina may act as surety on any contract bond, both general and limited, including all bonds required for public projects.
A professional engineer licensed by the State Board of Registration for Professional Engineers may act as sureties on any contract bond, both general and limited, including all bonds required for public projects within his discipline.
Please note that if you are putting up your own money (cash deposit) instead of getting someone else to put up their money (performance bond), you will not be protected if the contractor does complete his work properly. When possible, it’s best to put up a performance bond.