Wyoming 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 Wyoming 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 Wyoming Construction Bond?

Wyoming construction bonds are intended to prevent construction project owners from experiencing financial losses due to a contractor’s unlawful or unethical actions. They do this by: 

  1. requiring the contractor who purchases the bond (the bond’s “principal”) to abide by all applicable legal and contractual requirements and
  2. legally obligating the principal to compensate the project owner (the bond’s “obligee”) or other injured party for monetary damages caused by the contractor’s noncompliance.

What Types of Wyoming Construction Bonds May Be Needed?

In Wyoming, only electrical contractors are licensed at the state level. However, some cities and counties have their own licensing procedures that include purchasing a contractor license bond.

Wyoming’s “Little Miller Act,” the state’s version of the federal Miller Act, requires both performance bonds and payment bonds for state-funded projects valued in excess of $7,500. Projects up to $100,000 require these bonds to be in an amount equal to 100% of the contract value. For projects valued in excess of $100,000, performance and payment bonds must be for 50% of the contract value.

Although private construction projects are not subject to Wyoming’s Little Miller Act, it’s common for private project owners to require their contractors to furnish both performance and payment bonds, particularly for higher value projects. And, contractors competing for government or private construction projects may be required to provide a bid bond.

Other construction bonds that contractors operating in Wyoming may need to purchase include:

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

How Does a Wyoming Construction Bond Work?

There is a third party to every Wyoming construction bond in addition to the obligee and the principal —the bond’s guarantor (called the “surety”). 

The surety investigates every claim received, and if it’s found to be valid, the principal is legally obligated to pay it. But the surety’s guarantee of payment is an agreement to extend credit to the principal by paying a valid claim on the principal’s behalf. So, instead of paying the claim directly, the principal must repay the surety according to the surety’s credit terms. If not repaid, the surety will sue the principal to recover the funds.

How Much Does It Cost?

The premium cost of a construction bond is determined by multiplying the bond amount by the premium rate. The obligee establishes the bond amount based on the estimated project value, and the surety assigns the premium rate through risk assessment. The primary risk is that the principal might not repay the surety for claims paid on the principal’s behalf. The universally accepted measure of that risk is the principal’s personal credit score. 

A high credit score means low risk, which results in a low premium rate. Conversely, a low credit score means the risk 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 Wyoming 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 Wyoming Construction Bond?

Wyoming construction bonds are intended to prevent construction project owners from experiencing financial losses due to a contractor’s unlawful or unethical actions. They do this by: 

  1. requiring the contractor who purchases the bond (the bond’s “principal”) to abide by all applicable legal and contractual requirements and
  2. legally obligating the principal to compensate the project owner (the bond’s “obligee”) or other injured party for monetary damages caused by the contractor’s noncompliance.

In Wyoming, only electrical contractors are licensed at the state level. However, some cities and counties have their own licensing procedures that include purchasing a contractor license bond.

Wyoming’s “Little Miller Act,” the state’s version of the federal Miller Act, requires both performance bonds and payment bonds for state-funded projects valued in excess of $7,500. Projects up to $100,000 require these bonds to be in an amount equal to 100% of the contract value. For projects valued in excess of $100,000, performance and payment bonds must be for 50% of the contract value.

Although private construction projects are not subject to Wyoming’s Little Miller Act, it’s common for private project owners to require their contractors to furnish both performance and payment bonds, particularly for higher value projects. And, contractors competing for government or private construction projects may be required to provide a bid bond.

Other construction bonds that contractors operating in Wyoming may need to purchase include:

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

There is a third party to every Wyoming construction bond in addition to the obligee and the principal —the bond’s guarantor (called the “surety”). 

The surety investigates every claim received, and if it’s found to be valid, the principal is legally obligated to pay it. But the surety’s guarantee of payment is an agreement to extend credit to the principal by paying a valid claim on the principal’s behalf. So, instead of paying the claim directly, the principal must repay the surety according to the surety’s credit terms. If not repaid, the surety will sue the principal to recover the funds.

The premium cost of a construction bond is determined by multiplying the bond amount by the premium rate. The obligee establishes the bond amount based on the estimated project value, and the surety assigns the premium rate through risk assessment. The primary risk is that the principal might not repay the surety for claims paid on the principal’s behalf. The universally accepted measure of that risk is the principal’s personal credit score. 

A high credit score means low risk, which results in a low premium rate. Conversely, a low credit score means the risk 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%.

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