Florida 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 Florida 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 Florida Construction Bond?

Florida construction surety bonds protect state and local contracting authorities and private project owners against the financial harm that can result from a contractor’s regulatory or contractual violations. 

 

What Types of Florida Construction Bonds May Be Needed?

Florida licenses contractors at the state level and some Florida municipalities have their own licensing requirements. Some contractors will have to provide a contractor license bond in order to obtain a state license.

Florida’s Little Miller Act, the state’s version of the federal Miller Act, requires both performance bonds and payment bonds from contractors working on state-funded projects valued in excess of $100,000, though there may be some exemptions. Private project owners may also require their contractors to provide these bonds. Bid bonds may be required by both public and private project owners during a competitive bidding process. Both government and private project owners may require contractors to purchase any of the following types of construction bonds:

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

How Does a Florida Construction Bond Work?

The three parties to every Florida construction bond are the: 

  • Obligee—the contracting authority/project owner
  • Principal—the contractor
  • Surety—the bond’s guarantor

The obligee sets the required bond amount, also known as the bond’s “penal sum.” The principal is legally obligated to pay valid claims up to the full amount of the bond. The surety agrees to extend credit up to that amount to the principal for the purpose of paying claims. The surety will initially pay the claimant as a loan to the principal, who then must repay the resulting debt to the surety. Not doing so can subject the principal to legal debt recovery action by the surety.

How Much Does It Cost?

The two factors that go into calculating the annual premium for a Florida construction bond are the required bond amount and the premium rate. The surety sets the premium rate based on the principal’s creditworthiness, which is a reliable measure of the risk of not being repaid for claims paid on the principal’s behalf. 

A high personal credit score equates with a low risk to the surety, so the premium rate will also be low. A low score means higher risk, which warrants 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 Florida 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 Florida Construction Bond?

Florida construction surety bonds protect state and local contracting authorities and private project owners against the financial harm that can result from a contractor’s regulatory or contractual violations. 

 

Florida licenses contractors at the state level and some Florida municipalities have their own licensing requirements. Some contractors will have to provide a contractor license bond in order to obtain a state license.

Florida’s Little Miller Act, the state’s version of the federal Miller Act, requires both performance bonds and payment bonds from contractors working on state-funded projects valued in excess of $100,000, though there may be some exemptions. Private project owners may also require their contractors to provide these bonds. Bid bonds may be required by both public and private project owners during a competitive bidding process. Both government and private project owners may require contractors to purchase any of the following types of construction bonds:

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

The three parties to every Florida construction bond are the: 

  • Obligee—the contracting authority/project owner
  • Principal—the contractor
  • Surety—the bond’s guarantor

The obligee sets the required bond amount, also known as the bond’s “penal sum.” The principal is legally obligated to pay valid claims up to the full amount of the bond. The surety agrees to extend credit up to that amount to the principal for the purpose of paying claims. The surety will initially pay the claimant as a loan to the principal, who then must repay the resulting debt to the surety. Not doing so can subject the principal to legal debt recovery action by the surety.

The two factors that go into calculating the annual premium for a Florida construction bond are the required bond amount and the premium rate. The surety sets the premium rate based on the principal’s creditworthiness, which is a reliable measure of the risk of not being repaid for claims paid on the principal’s behalf. 

A high personal credit score equates with a low risk to the surety, so the premium rate will also be low. A low score means higher risk, which warrants 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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Request a quote online or call today to speak with one of our surety bond experts about obtaining a Florida construction bond.