Connecticut Construction Bonds

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Connecticut construction bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

 

What Is a Connecticut Construction Bond?

When project owners (public or private) require contractors to obtain construction surety bonds, the purpose is to gain some protection against the financial harm that a contractor’s regulatory or contractual violations can cause. 

What Types of Connecticut Construction Bonds May Be Needed?

Connecticut does not require contractors to be licensed at the state level. However, some Connecticut cities and other local jurisdictions do require certain types of contractors to be licensed and have made the purchase of a contractor license bond a prerequisite for licensing.

Connecticut’s Little Miller Act, the state’s version of the federal Miller Act, mandates both performance bonds and payment bonds from contractors working on state-funded projects of a certain size. Contractors hired by private project owners may also be required to furnish these bonds. Bid bonds may be required when contractors are selected through competitive bidding. Both government contracting authorities and private project owners may require a contractor to provide any of the following types of construction bonds:

  • Maintenance bonds
  • Subdivision/site improvement bonds
  • Supply bonds
  • Solar decommissioning bonds
  • Right of Way bonds

How Does a Connecticut Construction Bond Work?

There are three parties to every Connecticut construction bond: 

  • The obligee—the contracting authority or project owner requiring the bond
  • The principal—the contractor purchasing the bond
  • The surety—the party guaranteeing the bond

The obligee sets the required bond amount. The principal is legally obligated to pay valid claims up to that amount. And the surety guarantees that they will be paid by extending credit to the principal for that purpose. The usual practice is for the surety to pay the claimant directly, which creates a debt the principal must subsequently pay according to the surety’s credit terms. The surety can sue a principal who does not repay the debt.

How Much Does It Cost?

The annual premium for a Connecticut construction bond depends on the required bond amount and the premium rate. The surety sets the premium rate through an underwriting process that assesses the risk of non-repayment for claims paid on the principal’s behalf. The metric used is the principal’s personal credit score. 

A high personal credit score means the risk to the surety is low, so the premium rate will also be low. A low score is a sign of higher risk, which results in a higher premium rate.

The premium rate for a principal with good credit usually is in the range of 1% to 3%.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Connecticut construction bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

 

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FREE CONSTRUCTION BOND QUOTE

What Is a Connecticut Construction Bond?

When project owners (public or private) require contractors to obtain construction surety bonds, the purpose is to gain some protection against the financial harm that a contractor’s regulatory or contractual violations can cause. 

Connecticut does not require contractors to be licensed at the state level. However, some Connecticut cities and other local jurisdictions do require certain types of contractors to be licensed and have made the purchase of a contractor license bond a prerequisite for licensing.

Connecticut’s Little Miller Act, the state’s version of the federal Miller Act, mandates both performance bonds and payment bonds from contractors working on state-funded projects of a certain size. Contractors hired by private project owners may also be required to furnish these bonds. Bid bonds may be required when contractors are selected through competitive bidding. Both government contracting authorities and private project owners may require a contractor to provide any of the following types of construction bonds:

  • Maintenance bonds
  • Subdivision/site improvement bonds
  • Supply bonds
  • Solar decommissioning bonds
  • Right of Way bonds

There are three parties to every Connecticut construction bond: 

  • The obligee—the contracting authority or project owner requiring the bond
  • The principal—the contractor purchasing the bond
  • The surety—the party guaranteeing the bond

The obligee sets the required bond amount. The principal is legally obligated to pay valid claims up to that amount. And the surety guarantees that they will be paid by extending credit to the principal for that purpose. The usual practice is for the surety to pay the claimant directly, which creates a debt the principal must subsequently pay according to the surety’s credit terms. The surety can sue a principal who does not repay the debt.

The annual premium for a Connecticut construction bond depends on the required bond amount and the premium rate. The surety sets the premium rate through an underwriting process that assesses the risk of non-repayment for claims paid on the principal’s behalf. The metric used is the principal’s personal credit score. 

A high personal credit score means the risk to the surety is low, so the premium rate will also be low. A low score is a sign of higher risk, which results in a higher premium rate.

The premium rate for a principal with good credit usually is in the range of 1% to 3%.

 

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