Oklahoma Performance Bonds

performance bond - What is a Surety Performance Bond in Oklahoma

What is a Surety Performance Bond in Oklahoma?

A surety performance bond protects a contractor in case he fails to complete work according to specifications. In other words, the company that hires the contractor uses the bond to pay for damages or penalties if something goes wrong. 

In Oklahoma, there are two types of surety bonds: contract bonding and commercial bond. The contract bond is required when there is no general contractor on-site at all times when you have employees working on a project. A commercial bond is needed when a general contractor contracts another party but has not assigned an individual responsible for overseeing construction. 

The Commercial Contract Bond can be purchased from an independent agent or broker who works with multiple institutions. When you purchase your bonds from one easy source, you don’t have to place calls to several different agencies.

Just how much is a Surety Performance Bond in Oklahoma?

There are different factors that affect the price of any surety bond. The main factors are the amount of the bond to be written, company premiums, and state regulations. Some other less influential factors are who the principal requesting the bond is and what type of work is being contracted to be performed. Factors such as these will not make much difference in your particular situation, but they generally play a role in determining what you might have to pay to get bonded.

For a contractor who has been in business for some time and has good credit, the premium will probably be lower. On the other hand, if you are a new contractor without much credit experience in your industry, or it is a large project that you are claiming substantial value on, then the bond premium might be considerably higher.

What’s the process to get a Performance and Payment Bond in Oklahoma?

Here are the steps to getting a Performance and Payment bond in Oklahoma:

  1. Get your solicitation documentation. The first step is to get your bid documents. These are available from the city or county you are bidding your project with. You can also access them through an online website if they provide them that way (most do). 

You will typically need to sign up or log in to their website, then search for “request bids” or something similar pertaining to what you want/need. Some require that you fax information, while others allow you to just email it over. Make sure whatever documentation they ask for, you get it back within 48 hours, so you don’t miss out on potential opportunities.

  1. Get your bond set up. After you have gotten the bid documentation, you will then need to go through the underwriting process with your surety company (or whoever they ask for this). Underwriters typically give you one day to get everything back in order before they close out the opportunity.
  2. Bid! Now that all of the paperwork has been mailed or faxed, now it is time to place your bid. At this moment, you are now covered by your Performance and Payment bond once it is posted with workers compensation insurance, general liability insurance, and property damage coverage (the minimums required for public works projects). Congratulations! You now qualify as a low bidder! You should then receive an email or notification that you won the project, at which point you would proceed with the next steps to initiate your project.
  3. Get paid! As long as you meet the terms of the contract, now it is time for you to get PAID. You will need to provide invoices that match the specifications listed in the contract and then submit them for payment. You can typically email or fax these documents over, but some require snail mail so just follow the guidelines provided by the public entity awarding your project.
  4. Finish strong! Now that all projects are done, you want to make sure if there are claims against your bond, they are taken care of accordingly. You want to leave on good terms, so be sure not to leave anything hanging out there unresolved if possible. You would usually get a call from the surety company within 30 days after all work has been completed, but if you do get a claim afterward, it is your responsibility to send them your records or other necessary paperwork needed for the claim.

From start to finish getting a Performance and Payment bond in Oklahoma can be under 2 months. Most of this time is taken up by waiting on the documents from the public entity and having to wait for their underwriting process to be complete.

How to Get a Performance Bond in Oklahoma?

A performance bond is required in Oklahoma to guarantee that the contractor will complete the work for which he was contracted, and it must be obtained by the contractor before starting your project. As stated in 15 Oklahoma Administrative Code section 10:30, “No license shall be issued until such evidence of financial responsibility has been filed with and approved by the Board.” 

In order to get a performance bond in Oklahoma, you must designate an agent who can accept service on behalf of your company if there are ever any issues or problems during the course of your project. This person serves as a point of contact between yourself and the licensing board.

In addition, this individual should have several years of contracting experience and be free from any financial or legal difficulties. Your performance bond must be set at no less than $10,000 for projects up to $25,000 in price; it should be between $10,000 and $20,000 if your project costs between $25,001 and $100,000; more than that will require a higher bond value.

Where can I get a performance bond in Oklahoma?

In Oklahoma, a performance bond can be acquired from a surety bond company. Many different types of bonding companies offer a variety of contract forms for many purposes, including commercial contracts and construction contracts. When choosing a surety company to go with, there are some important factors that should be considered as well as the cost of the bond itself.

Some Oklahomans consider hiring an insurance agent or broker over going online to shop for their bonds themselves because they feel more comfortable having someone explain everything in detail about what each type has to offer them. Some people may also prefer this approach because they have worked with agents and brokers before and trust them more than doing business online sometimes. It all depends on personal preference and how much time one is willing to spend shopping around.

Another good way to find a performance bond in Oklahoma is by asking for a list of local and national surety companies from large employers or business professionals, such as real estate agents. If the company they work for has worked with them before, there is a strong chance that those same individuals will use those same companies again.

Visit Executive Surety Bonds to know more about performance bonds!

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