Oregon Performance Bonds

performance bond - What is a Surety Performance Bond in Oregon

What is a Surety Performance Bond in Oregon?

A court-approved performance bond in Oregon can be referred to as a “surety.” Such bonds are designed to protect the public against defects and/or damages arising from construction work or labor in Oregon. 

When certain types of surety bonds are required, such as performance or payment bonds, an indemnitor and obligee relationship exists. The indemnitor agrees to provide compensation if the contractor fails to pay subcontractors, laborers, and other parties working on a project for which they have been contracted. 

The indemnitor can be any individual or organization that has entered into a contract with the principal. The obligation is contingent upon There being a legal liability and Proof of Loss” by the third-party claimant.

When filing a suit against one of these Oregon Surety Bonds in court, it must meet certain criteria before a suit may be brought forward. According to ORS 86.753(2), the claimant must bring an action against the surety in a court of competent jurisdiction within 120 days from the time they become aware of the cause(s) to file suit. An exception exists that allows for additional time if serious illness or incapacity prevents a claimant from filing within the 120 day period.

Just how much does a Surety Performance Bond in Oregon?

Bond cost varies based on the type of license you are applying for, the requirements of your individual bond, and if you have any prior offenses. Get an online surety bond quote in just a few easy steps by simply filling out our simple application. Our team will also work with your business to get your bond posted quickly so that you can receive your license or permit that much faster.

The amount of the performance bond needs to be between 10% and 20% of the contract value. The higher percentage applies if there are poor payment history records on file with the state. The lower percentage will apply if no such record exists within five years. You can insure for up to $200,000 per job on most projects, but be aware that having both project insurance and contractor’s performance bond is not allowed.

All contractors working in Oregon must have a valid contractor license issued with this state. The bond requirement will apply to all projects valued at over $50,000. Projects listed with the State of Oregon Contractors Board are subject to this performance bond requirement.

Please note that the state of Oregon does not allow you to insure for more than one contract per bond. Should you apply for more than one job in this state, you’ll need separate bonds for each project.

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

A performance bond guarantees that you will complete your job or tasks as promised even if unforeseen events occur that might cause delays or problems with working conditions. A financial guarantee ensures that if there are insufficient funds to pay the general contractor’s subcontractor, then the general contractor’s performance bond will be responsible.

The surety bond is a written agreement between an obligee and a surety company where the obligee is protected financially against losses due to the act of the principal (the contractor) in fulfilling their obligation under the contract. A person or business can not get bonded through their state government; they must apply for bonding with one of the few licensed commercial bonding companies in their state. 

To obtain a performance and payment bond, you need to contact commercial bonding companies directly. You can easily find them online by doing a quick search for Oregon contractor bonds. The surety company does not charge a fee to approve your bid, but you will have to pay a fee that can vary depending on your project’s size and scope.

You will need additional information about your tax status, financial history, qualifications, relevant professional licenses if you are applying for performance & payment bonds through this office. If you do not get bonded prior to submitting bids on public works jobs, then risk losing all of the added costs involved.

How to Get a Performance Bond in Oregon?

Contractors who would like to apply for a bond should be aware of what each type entails. These bonds can vary by details such as premium amounts, coverage limits, and protection clauses.

The surety bond process starts with an application process where applicants must submit a valid surety bond application form to their insurance company. This is an important first step because if the applicant’s information is incomplete or inaccurate, it will be rejected, and the process will have to start over again. Applicants should ensure that all information in the form is complete, accurate, and truthful before signing it.

The next step of the process includes the submission of bondsman license records for review by underwriters in Oregon. The duration of this review varies based on certain factors, such as previous applications submitted in the past. Underwriters will then compare their records with those submitted in order to determine if they are qualified to join the surety bond program. 

This step helps both parties determine which level of coverage they require for bonding purposes. Once underwriters have determined which protection level is required, they will either accept or reject the proposal. If the proposal is accepted, underwriters will provide a quote for bond premiums and coverage limits based on the applicant’s financial history.

When applying for a construction performance bond, Oregon requires applicants to include proof of workers’ compensation insurance in their application packet. The specific requirements vary depending on whether or not an applicant has employees who must be covered by the policy, but all applicants should have copies of their certificates of insurance when filing out application documents for their bond. These certificates must be issued within 30 days prior to the dates specified in the surety bond application.

Where can I get a performance bond in Oregon?

Many real estate transactions in Oregon require a performance bond. A performance bond is an insurance policy that guarantees the completion of the work for which it was issued. All contractors and subcontractors on public works projects in Oregon must provide their own performance bond. 

Subcontractors on all other private and public construction projects in Oregon must provide their own bonds when requested by the owner or contractor. Bonds required by government agencies typically do not exceed $10,000; these bonds are usually for specialized types of work such as excavation, structural concrete, masonry, and painting.

A contractor may obtain a single-performance bond or an annual bond from any surety licensed to do business in Oregon. Annual bonds are sometimes referred to as blanket bonds because they cover the contractor’s entire construction season, typically from March 1 through November 15 each year. A bond is not required for any one-time work that does not exceed $10,000 and doesn’t require a license or permit.

Visit Executive Surety Bonds to know more about performance bonds!

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