Kansas 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 Kansas 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 Kansas Construction Bond?

Kansas construction bonds are surety bonds that provide protection for the owners of construction projects, both government-funded and private, against financial losses resulting from a contractor’s failure to comply with regulatory or contractual requirements. Each construction bond requires the contractor who purchases it to comply with specific statutory and contractual obligations and to pay monetary damages resulting from noncompliance.

What Types of Kansas Construction Bonds May Be Needed?

While contractor license bonds are not required at the state level, a number of local jurisdictions in Kansas do have their own licensing and bonding rules.

Kansas’s “Little Miller Act” requires performance bonds and payment bonds for state-funded construction projects valued above $100,000. Technically, private construction projects in Kansas are also subject to the bonding requirements of the state’s Little Miller Act, though in practice, this often is regarded as optional. Additionally, both government and private project owners may require bid bonds when contracts are awarded through competitive bidding.

Other construction bonds that may be required by both public and private project owners include:

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

How Does a Kansas Construction Bond Work?

Every Kansas construction bond is legally binding on three parties, which are referred to as the:

  • Obligee—the project owner requiring the bond
  • Principal—the contractor purchasing the bond
  • Surety—the bond’s guarantor

Although the legal obligation to pay valid claims against a Kansas construction bond falls squarely on the principal’s shoulders, the surety guarantees their payment. Here’s how that guarantee works. The obligee establishes a line of credit for the principal when the bond is purchased. If a valid claim is submitted, the surety will pay it on the principal’s behalf as an extension of credit to the principal. The principal must subsequently repay the resulting debt to the surety or face legal action to recover the funds.

How Much Does It Cost?

The annual premium for a Kansas construction bond is calculated by multiplying the bond amount by the premium rate, which the surety assigns to each principal on a case-by-case basis. The premium rate reflects the surety’s assessment of the risk of not being repaid for credit extended to the principal. The accepted measure of that risk is the principal’s personal credit score.

A high credit score means the risk to the surety is low, so the premium rate also will be low. A low credit 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 Kansas 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.

CONTACT US FOR A

FREE CONSTRUCTION BOND QUOTE

What Is a Kansas Construction Bond?

Kansas construction bonds are surety bonds that provide protection for the owners of construction projects, both government-funded and private, against financial losses resulting from a contractor’s failure to comply with regulatory or contractual requirements. Each construction bond requires the contractor who purchases it to comply with specific statutory and contractual obligations and to pay monetary damages resulting from noncompliance.

 

While contractor license bonds are not required at the state level, a number of local jurisdictions in Kansas do have their own licensing and bonding rules.

Kansas’s “Little Miller Act” requires performance bonds and payment bonds for state-funded construction projects valued above $100,000. Technically, private construction projects in Kansas are also subject to the bonding requirements of the state’s Little Miller Act, though in practice, this often is regarded as optional. Additionally, both government and private project owners may require bid bonds when contracts are awarded through competitive bidding.

Other construction bonds that may be required by both public and private project owners include:

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

Every Kansas construction bond is legally binding on three parties, which are referred to as the:

  • Obligee—the project owner requiring the bond
  • Principal—the contractor purchasing the bond
  • Surety—the bond’s guarantor

Although the legal obligation to pay valid claims against a Kansas construction bond falls squarely on the principal’s shoulders, the surety guarantees their payment. Here’s how that guarantee works. The obligee establishes a line of credit for the principal when the bond is purchased. If a valid claim is submitted, the surety will pay it on the principal’s behalf as an extension of credit to the principal. The principal must subsequently repay the resulting debt to the surety or face legal action to recover the funds.

The annual premium for a Kansas construction bond is calculated by multiplying the bond amount by the premium rate, which the surety assigns to each principal on a case-by-case basis. The premium rate reflects the surety’s assessment of the risk of not being repaid for credit extended to the principal. The accepted measure of that risk is the principal’s personal credit score.

A high credit score means the risk to the surety is low, so the premium rate also will be low. A low credit 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%.

REQUEST A QUOTE

Request a quote online or call today to speak with one of our surety bond experts about obtaining a Kansas construction bond.