FAQ's
1) What is a Surety Bond?
A written agreement whereby one party, called a Surety, makes promises or guarantees on behalf of another party, called a Principal. In the agreement, the Surety makes these promises or guarantees to a third party called the Obligee.
2) What is a Contract Bond?
Where one party (Principal) has been awarded a construction or supply contract with a condition that a bond from a Surety will be given to guarantee to the Owner (Obligee) the performance of the Principal's obligations under the contract.
3) What is a Bid Bond?
A bond given to a Federal, State, County, or Municipal Government agency at the time of bid which guarantees the good faith of the Contractor (Principal), i.e. that if the Principal is awarded the contract the Principal will enter into the contract and post the required Performance and Payment Bonds. Bid bonds are typically required only as a percentage of the Principals bid, usually 5-20%.
4) What is a Performance Bond?
The Performance Bond follows the bid bond if the Principal (Contractor) was deemed low bidder and is awarded a contract. The Performance Bond guarantees that the contractor will complete the contract in accordance with the terms, conditions and specifications of the contract. The Performance Bond is required as a condition of being awarded the contract.
5) What is a Payment Bond?
A Payment Bond is usually required as a companion to the Performance Bond. The Payment Bond guarantees that material suppliers and direct labor suppliers will be paid. Though Payment Bonds are typically separate documents they are issued for no extra charge, when required.
6) How are Contractors who need Surety Bonds evaluated?
The Surety industry evaluates three basic factors, known as the three "C's". They are,
- Character - Does the Principal's record suggest good character, that he or she will be faithful to their obligations?
- Capacity - Does the Principal have the skill, experience and knowledge necessary to perform his or her obligations?
- Capital - Does the Principal have the financial wherewithal to support or finance the completion of the project?
7) What is a License or Permit Bond?
A bond which is required as a condition of receiving a License to engage in a certain business or as a condition of receiving a permit to exercise a certain privilege. The bond guarantees that the Principal will perform his or her obligations under the license or permit. These bonds are designed to protect the general public as well as the Government agency issuing the permit or license. License or Permit Bonds are required from businesses as well as individuals.
8) Why should I use CCI?
CCI has experienced staff that is ready to assist you. We represent various markets that can handle standard and specialty bonding. We have the latest tools for specialty bonding to assist you in obtaining a bond, including Fund Control/Escrow, collateral and 3rd party indemnity to name a few.
9) What is the limit capacity of CCI's Surety Bonds?
CCI has markets that can support bonds of up to $50,000,000
10) What rates does CCI charge?
The rate depends on the type of bond requested and the financial stability of the company or person obtaining the bonding.
11) In which states can CCI provide bonds?
CCI has a normal operating area of Minnesota, Iowa, Wisconsin, South Dakota and North Dakota.
12) How do I obtain a bond from CCI?
Call us toll free at (866) 317-3294 and we will help you obtain a bond that meets your needs.
13) How long does it take CCI to obtain a bond?
Our response time is always within 24 hours. If we receive everything we need from you we can often obtain the bond that very same day.