Santa Monica City Permit Faithful Performance Bond
The City of Santa Monica requires businesses in the area to apply for a Faithful Performance Bond in order to secure permits corresponding to their projects and to activate said licenses. These requirements are needed to ensure the compensation of the city should accredited applicants cause any licensing infractions – such as damage to government-owned properties, substandard or unsafe constructions, and the like – in the course of their respective projects.
What is a Faithful Performance Bond?
Unlike regular surety bonds that simply secure the Obligee from damaged or substandard work, a faithful performance bond will guarantee that Principals will faithfully adhere to their work and all terms prescribed and agreed upon in the contract. This bond must be secured and submitted along with the construction permit for the City of Santa Monica to authorize the commencement of the applicant’s project or operation.
Although the City of Santa Monica does not require credit checks for the bond, surety providers will conduct their own as part of their underwriting.
What is the Santa Monica City Permit Faithful Performance Bond?
Prior the conduct of any work affecting the public right-of-way or any other limits, businesses in the Santa Monica area must secure a faithful performance bond. The bond guarantees that developers or applicants will adhere to the terms of work, deliver expected outcomes to quality, and meet the City rules, regulations, standards, ordinances, and statutes.
How does it work?
The Santa Monica City Permit Faithful Performance Bond must be issued by a surety bond provider certified by California’s Department of Insurance. The parties in the agreement are the Principal (permit applicant or business), Obligee (City of Santa Monica), and Surety/Bond Company or Obligor (surety bond provider/insurance).
The Surety Company will guarantee the compensation (performance bond) of the Obligee should the Principal fail to deliver agreed upon services or violate any licensing provisions. The Surety Company will receive and assess the validity of all public claims where claims may only amount to the total penal sum arranged in the bond form. The Principal shall reimburse all expenses covered by the Surety Company.
The Bond Company is secured through an indemnity agreement as the permit applicant or licensed business will ensure the full reimbursement of the claims, including legal fees and premiums. This agreement shall be made before the execution of the bond.
How much does it cost?
The Faithful Performance Bond of Santa Monica is set between 1% and 5% of the total bond amount. This will ultimately vary depending on the applicant’s credit score and license and business history.
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How can I apply for this bond?
At Surety Bond Authority, we are dedicated to help you get your bond the fast and easy way. Here is a step-by-step guide to help you get started.
Secure your bond as early as today to get your corresponding permits ready in no time. If you are ready to get your application processed today, you can APPLY HERE. Rest assured our expert surety bond agent will guide you from the time of your application until the issuance of your bond.
In the assessment phase, our underwriter will need the following information:
- Nature of your profession or business
- Credit score
- Financial strength
For the speedy processing of your application, ensure you have gathered and provided accurate information upon submission.
Once the assessment is done, we will promptly issue your bond and send it your way. Contact us today and get your bond issued in no time!