{"id":4168,"date":"2022-03-25T08:48:53","date_gmt":"2022-03-25T01:48:53","guid":{"rendered":"http:\/\/ligaasuransi.com\/?p=4168"},"modified":"2022-03-25T08:48:53","modified_gmt":"2022-03-25T01:48:53","slug":"mengapa-bid-bond-penting-bagi-pemilik-proyek","status":"publish","type":"post","link":"http:\/\/ligaasuransi.com\/en\/mengapa-bid-bond-penting-bagi-pemilik-proyek\/","title":{"rendered":"Why bid bond is important for the project owners?"},"content":{"rendered":"

Liga Asuransi<\/a> – Dear reader, how are you? It seems that we still want to continue our discussions about risk management and insurance around the construction industry, this is in line with the current fast development of the construction industry.\u00a0<\/span><\/p>\n

As we keep saying the risk of construction is high, then it is necessary to know more deeply about the potential risks that exist thus can be anticipated from the earlier stage.<\/span><\/p>\n

The most interested parties to Bind Bond is the project owners.<\/span><\/p>\n

As an insurance broker and consultant focused on the Engineering Procurement and Construction (EPC) industry, we want to share our knowledge and experience so that you and your clients can avoid project losses and failures.<\/span><\/p>\n

There are 2 types of risks of construction that we need to pay attention to, namely financial risk and physical risk.<\/span><\/p>\n

The financial risk is loss due to fines, penalties, and other costs resulting from failure to meet commitments to the employer.<\/span><\/p>\n

Physical risk is damage and physical loss because of an accident guaranteed in the insurance policy.<\/span><\/p>\n

This time we only focus on financial risks, especially because of the project tender process, namely Bid Bond.<\/span><\/p>\n

We hope that this article will be useful to you. If you are interested, please share it with your colleagues so that they also understand you.<\/span><\/p>\n

What is a bid bond?<\/b><\/p>\n

A bid bond is a type of construction bond that protects the owner or developer in a construction bidding process.\u00a0<\/span><\/p>\n

The function of the bid bond<\/a> is to provide a guarantee to the project owner that the bidder will complete the work if selected. The existence of a bid bond gives the owner assurance that the bidder has the financial means to accept the job for the price quoted in the bid.<\/span><\/p>\n

A bid bond is typically obtained through an insurance broker, such as an insurance company or bank, and it helps guarantee that a contractor is financially stable and has the necessary resources to take on a project. Bid bonds are commonly required on projects that also involve performance bids and payment bonds.\u00a0<\/span><\/p>\n

Bid Bond Basics<\/b><\/p>\n

A bid bond typically involves three parties: the obligee, the principal, and the surety. The obligee is the owner or developer of the construction project under bid. The principal is the bidder or proposed contractor. The surety is the insurer or bank that issues the bid bond to the principal.\u00a0<\/span><\/p>\n

The principal purchases the bid bond from the surety for a set price, much like a premium for an insurance policy. The coverage value of the bond is called the penal sum and represents the maximum amount of damages the surety will cover with the bond. Penal sums can range from 5 to 20 percent of the bid amount.<\/span><\/p>\n

The main points of the bid bond:<\/span><\/p>\n