Builders in Oregon need a performance and payment bond when owners require assurance for project delivery and payment. Surety Bonds Agent serves all 50 states with clear guidance and fast quote support. Apply online for a free quote.
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Project owners, both public and private, stand to lose a lot of money when their contractors fail to complete a construction job in accordance with the terms of the construction contract and/or don’t pay their subcontractors and suppliers. An Oregon performance and payment bond combines financial protection against both types of loss in a single bond.
The bond helps prevent losses by requiring the contractor purchasing it to operate in complete compliance with all applicable laws and regulations as well as the terms of the construction contract. It also provides a way to compensate the project owner (the bond’s “obligee”) when a loss occurs and prevents mechanic’s liens on the property.
Who Needs One?
Like the Federal Miller Act, Oregon’s “Little Miller Act” requires performance and payment bonding for publicly funded projects valued in excess of $100,000. However, the bonding requirement for public transportation projects valued at more than $50,000 is unique to Oregon. The bond amount for each type of protection (performance and payment) must be equal to the value of the contract.
Many private project owners also require contractors to furnish a performance and payment bond.
How Does a Performance & Payment Bond Work?
The obligee is one of three parties to the legally binding surety bond agreement. The others are the contractor purchasing the bond (“the principal”) and the bond’s guarantor (the “surety”).
The principal is legally obligated to pay all valid claims. The surety determines whether a claim is valid and will advance the funds to the principal to pay it if it is. The principal must subsequently repay that debt to the surety or face legal action by the surety to recover the funds.
The annual premium for an Oregon performance and payment bond is the result of multiplying the required bond amount set by the obligee and the premium rate set by the surety on a case-by-case basis through underwriting.
The main underwriting goal is to assign a premium rate that adequately protects the surety against the risk of not being repaid for claims paid on the principal’s behalf. That risk is measured largely based on the principal’s personal credit score.
A principal with a high credit score is considered a low risk to the surety, which results in a low premium rate. A low credit score signals higher risk and warrants a higher premium rate.
The premium rate for a well-qualified principal usually is in the range of 1% to 3%.
We proudly serve all 50 states, offering a full range of surety bonds. To buy surety bonds online:
There’s no obligation, and we can often help you get bonded in 24 hours or less.
Select the bond you need — commercial, contract, or any specialized bond. We help you find exactly what is required in your state.
Complete a short online form. It only takes a few minutes, with no extra paperwork or long verification steps.
Get fast approval and receive your bond instantly by email. Your document is ready to use right away.
Simply fill out our convenient online application form to get started.
We work with a wide range of carriers to provide many options to our clients.
As an independent agency, we can leverage our carrier network to find the most competitive rates for the bonds you need.
We work to get you bonded as quickly as possible, often in 24 hours or less.
Our experienced surety bond agents provide personalized assistance to help you understand your bonding requirements and options.
Request an online quote today! Or speak with one of our knowledgeable surety bond agents about the commercial bonds you are interested in.
