West Virginia 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 West Virginia 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 West Virginia Construction Bond?

West Virginia construction bonds set certain standards for the performance and conduct of contractors and protect project owners against financial loss resulting from a contractor’s regulatory or contractual violations. The terms of a construction bond require the contractor to compensate the project owner for monetary damages incurred because of a violation.

What Types of West Virginia Construction Bonds May Be Needed?

No bond is necessary for contractors to become licensed at the state level in West Virginia. But some municipal or county contracting authorities that require a license or permit may also require a contractor license bond. 

West Virginia’s “Little Miller Act” mandates both performance bonds and payment bonds from contractors as a condition for being awarded a public works or other project funded by the state when the value of that project exceeds a certain threshold. Although private construction projects don’t fall under the Little Miller Act, many private project owners are requiring performance and payment bonds. And both private project owners and government contracting officials at any level have the option of requiring a bid bond from each contractor in competitive bidding situations.

Other construction bonds that a contractor operating in West Virginia may need include:

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

How Does a West Virginia Construction Bond Work?

There are three parties to any construction bond:

  • The project owner (the bond’s “obligee”),
  • The contractor (known as the “principal”), and 
  • The bond’s guarantor (referred to as the “surety”).

The principal is legally obligated to pay claims the surety’s investigation shows to be valid. But the surety guarantees the payment of valid claims by agreeing to extend enough credit to the principal to pay them. Industry-wide practice is for the surety to pay a valid claim on behalf of the principal and then be repaid by the principal. The surety is almost certain to take legal debt recovery action against a principal who fails to comply with the surety’s credit terms.

How Much Does It Cost?

The annual premium for a West Virginia construction bond is a small percentage of the bond amount. That percentage is the premium rate, which the surety assigns to each principal after assessing the risk of not being repaid for the credit extended to the principal in paying claims. 

The premium rate is based largely on the principal’s personal credit score. A high credit score is associated with financial responsibility and means the risk to the surety is low. Low risk earns the principal a low premium rate. Conversely, a low credit score means the risk of the surety not being repaid is higher, 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 West Virginia 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 West Virginia Construction Bond?

West Virginia construction bonds set certain standards for the performance and conduct of contractors and protect project owners against financial loss resulting from a contractor’s regulatory or contractual violations. The terms of a construction bond require the contractor to compensate the project owner for monetary damages incurred because of a violation.

 

No bond is necessary for contractors to become licensed at the state level in West Virginia. But some municipal or county contracting authorities that require a license or permit may also require a contractor license bond. 

West Virginia’s “Little Miller Act” mandates both performance bonds and payment bonds from contractors as a condition for being awarded a public works or other project funded by the state when the value of that project exceeds a certain threshold. Although private construction projects don’t fall under the Little Miller Act, many private project owners are requiring performance and payment bonds. And both private project owners and government contracting officials at any level have the option of requiring a bid bond from each contractor in competitive bidding situations.

Other construction bonds that a contractor operating in West Virginia may need include:

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

There are three parties to any construction bond:

  • The project owner (the bond’s “obligee”),
  • The contractor (known as the “principal”), and 
  • The bond’s guarantor (referred to as the “surety”).

The principal is legally obligated to pay claims the surety’s investigation shows to be valid. But the surety guarantees the payment of valid claims by agreeing to extend enough credit to the principal to pay them. Industry-wide practice is for the surety to pay a valid claim on behalf of the principal and then be repaid by the principal. The surety is almost certain to take legal debt recovery action against a principal who fails to comply with the surety’s credit terms.

The annual premium for a West Virginia construction bond is a small percentage of the bond amount. That percentage is the premium rate, which the surety assigns to each principal after assessing the risk of not being repaid for the credit extended to the principal in paying claims. 

The premium rate is based largely on the principal’s personal credit score. A high credit score is associated with financial responsibility and means the risk to the surety is low. Low risk earns the principal a low premium rate. Conversely, a low credit score means the risk of the surety not being repaid is higher, 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 West Virginia construction bond. _