New Hampshire 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 New Hampshire 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 New Hampshire Construction Bond?

New Hampshire construction bonds are all about protecting government contracting officials and the owners of private construction projects from the financial losses that can occur when contractors commit regulatory or contractual infractions. They serve both a preventive and a compensatory purpose by:

  1. Requiring contractors to comply fully with regulatory and contractual obligations, and
  2. Legally obligating them to pay valid claims for monetary losses caused by contractor violation

What Types of New Hampshire Construction Bonds May Be Needed?

In New Hampshire, certain types of specialty contractors are licensed at the state level. There is no statewide licensing of general contractors. But general contractors may have to obtain a local license or permit, which may require the purchase of a contractor license bond.

New Hampshire’s “Little Miller Act,” the state’s version of the federal Miller Act, requires contractors awarded state-funded projects with a value in excess of $200,000 to furnish both performance bonds and payment bonds. 

Private construction projects aren’t subject to the Little Miller Act. Nonetheless, private project owners also can require performance and payment bonds from their contractors. And both private and construction project owners may make the provision of a bid bond by each contractor a condition for bidding on a job.

Other construction bonds that contractors operating in New Hampshire may need include:

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

How Does a New Hampshire Construction Bond Work?

Every construction bond is a legally binding agreement among three parties referred to as the:

  • obligee—the project owner requiring the bond,
  • principal—the contractor purchasing the bond, and
  • surety—the party guaranteeing the bond.

The surety will investigate claims upon receipt and determine their legitimacy. If a claim is found to be valid, the principal is legally obligated to pay it. At the time a construction bond is purchased, the surety agrees to extend credit to the principal if it becomes necessary to pay a claim. In fact, the surety will actually pay the claimant on the principal’s behalf. The principal then must repay the resulting debt. Not doing so will most likely cause the surety to take legal action to recover the debt.

How Much Does It Cost?

Construction bonds are subject to underwriting to assess the risk of the surety not being repaid for claims paid on the principal’s behalf. The applicant’s personal credit score is the accepted measure of that risk and the key factor in setting the premium rate.

A high credit score is evidence of the principal’s financial responsibility and low risk to the surety. Low risk merits a low premium rate. A low credit score is a red flag for 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 New Hampshire 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 New Hampshire Construction Bond?

New Hampshire construction bonds are all about protecting government contracting officials and the owners of private construction projects from the financial losses that can occur when contractors commit regulatory or contractual infractions. They serve both a preventive and a compensatory purpose by:

  1. Requiring contractors to comply fully with regulatory and contractual obligations, and
  2. Legally obligating them to pay valid claims for monetary losses caused by contractor violation

In New Hampshire, certain types of specialty contractors are licensed at the state level. There is no statewide licensing of general contractors. But general contractors may have to obtain a local license or permit, which may require the purchase of a contractor license bond.

New Hampshire’s “Little Miller Act,” the state’s version of the federal Miller Act, requires contractors awarded state-funded projects with a value in excess of $200,000 to furnish both performance bonds and payment bonds. 

Private construction projects aren’t subject to the Little Miller Act. Nonetheless, private project owners also can require performance and payment bonds from their contractors. And both private and construction project owners may make the provision of a bid bond by each contractor a condition for bidding on a job.

Other construction bonds that contractors operating in New Hampshire may need include:

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

Every construction bond is a legally binding agreement among three parties referred to as the:

  • obligee—the project owner requiring the bond,
  • principal—the contractor purchasing the bond, and
  • surety—the party guaranteeing the bond.

The surety will investigate claims upon receipt and determine their legitimacy. If a claim is found to be valid, the principal is legally obligated to pay it. At the time a construction bond is purchased, the surety agrees to extend credit to the principal if it becomes necessary to pay a claim. In fact, the surety will actually pay the claimant on the principal’s behalf. The principal then must repay the resulting debt. Not doing so will most likely cause the surety to take legal action to recover the debt.

Construction bonds are subject to underwriting to assess the risk of the surety not being repaid for claims paid on the principal’s behalf. The applicant’s personal credit score is the accepted measure of that risk and the key factor in setting the premium rate.

A high credit score is evidence of the principal’s financial responsibility and low risk to the surety. Low risk merits a low premium rate. A low credit score is a red flag for 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 New Hampshire construction bond.