Oklahoma Construction Bonds

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Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.


What Are Oklahoma Construction Bonds?

Oklahoma construction bonds provide two kinds of protection against financial losses resulting from the unlawful or unethical actions of contractors working in the state. Preventively, construction bonds require contractors to operate in compliance with all applicable laws, regulations, and building codes. But in the event of violations, the injured party can be compensated for monetary damages.

What Oklahoma Construction Bonds May Be Needed?

Some commonly required construction bonds in Oklahoma are:

  • Bid bonds
  • Performance bonds
  • Payment bonds

These may be required by public or private project owners, particularly for larger projects. Project owners also may require other construction bonds, such as:

  • Contractor license bonds (state and local)
  • Maintenance bonds
  • Subdivision improvement bonds
  • Solar decommissioning bonds
  • Right of Way bonds

How Do Oklahoma Construction Bonds Work?

Every Oklahoma construction bond is legally binding on three parties:

  • The obligee – the party requiring the bond,
  • The principal – the contractor required to purchase the bond, and 
  • The surety – the bond’s guarantor.

The principal is legally obligated to pay valid claims against a construction bond, and the surety guarantees their payment. So, the surety pays the claimant directly, which is an extension of credit to the principal and creates a debt that must be repaid. The surety will take legal action to recover the debt, if necessary.

How Much Do They Cost?

The annual premium for an Oklahoma construction bond is the product of the required bond amount set by the obligee and the premium rate assigned by the surety. The premium rate is based on an underwriting assessment of the risk to the surety. The biggest concern is the risk of the surety not being repaid for any credit extended to the principal. So, the principal’s creditworthiness is the key factor and is measured by the principal’s personal credit score. 

A principal with good credit is a low risk to the surety, which means the premium rate will be low. A low credit score is a red flag for higher risk, which results in a higher premium rate. 

A well-qualified principal typically will be assigned a premium rate in the range of .5% to 3%.

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