Alabama Department of Transportation Bid and Performance Bond

Alabama Department of Transportation Bid and Performance Bond

Public highway projects of $50,000 or greater require the contractor to hold a Bid Bond through the Alabama Department of Transportation (ALDOT). If the contractor is awarded the contract, a Performance Bond (sometimes called Performance of the Work) must be filed with the ALDOT. Jet Insurance Company offers these bonds to assure the Department of Transportation that compensation is available in the event that a contractor defaults or breaches the contract.

APPLY FOR BOND

With Jet, the bonding process is minimal and straightforward. If you need your bond quickly, look no further.

What Is the Bond Limit and Cost of Alabama Bid and Performance Bonds?

The cost for both the Performance Bond and the Bid Bond depends primarily on the bond limit. The Bid Bond limit is 5% of the bid amount, with a maximum limit of $50,000. The Performance Bond amount is 100% of the contract bid price. Refer to the chart below for examples of pricing for various bond amounts. 

Bond LimitCost
$10,000$100
$25,000$188
$50,000$375
Rates for ALDOT Bid and Performance Bonds

Contractors with bond limits of $25,000 or more must have their credit reviewed — don’t worry, it’s just a soft credit check and won’t impact your credit.

The Bid Bond and Performance Bond Process With Jet

Jet’s application process can be completed in minutes. All that’s needed is some general information, such as the required bond limit. Contractors with bond limits under $25,000 can get the bond immediately by submitting information and making payment. If the bond limit is $25,000 or greater, a credit check must be completed by an underwriter to get you an approved rate. If this is the case, a Jet team member will provide you with a quote after a short review that can be purchased directly online. Your receipt and a copy of the bond will be sent to you right away. 

You are required to hand in the Bid Bond with your bid specifications. The Performance Bond must be filed with the ALDOT as well. Find their address below:

Alabama Department of Transportation
1409 Coliseum Boulevard
Montgomery, AL 36110

For contractors that have a Bid Bond and are awarded the contract, the liability on the Bid Bond is released as soon as a Performance Bond is filed with the Department of Transportation. The Performance Bond must be active for the duration of the contract. Once the contract is complete, the ALDOT will release the surety company (Jet) and you of liability. If you have questions or concerns about your bond, you can email us at [email protected]

How Does a Contractor Avoid Claims on Performance and Bid Bonds?

Abiding by the contract and following regulations per the Alabama Standard Specifications, 2018 Edition, ensures a smooth process. Still, breaches of contract and defaults can be a grey area and disputes may arise. When disputes happen, the ALDOT will generally allow the contractor to resolve the dilemma before requesting a payout from the bond. 

An example of a Bid Bond claim is a contractor who realizes the bid is off and is unable to honor the bid during the letting process. The contractor would then write a check to ALDOT, or if unable to, the surety bond would be tapped into.

An example of a Performance Bond claim would be during the construction of a project, a contractor gets behind schedule and cannot meet the quality of work or schedule agreed upon in the contract. The Construction Bureau would eventually request a bond claim payout.

If Jet receives notice of a bond claim payout, we take our time to review the details. We may request additional information and documentation from both you and the Department of Transportation. It is best to be responsive during this process. A valid bond claim will result in Jet making payment for the claim amount, up to the full bond limit. As a contractor, you are liable for your actions while performing work and therefore must reimburse Jet for the paid out claim. Claims are seen as a red flag to regulatory agencies and bonding companies and will result in difficulties obtaining future permits and bonds.

Are There Other Bonds That an Alabama Contractor Needs?

There are various other surety bonds required across Alabama for contractors. Whether you need a bond required for a local municipality or on a state level, Jet is here to help! Just give us a call at 855-296-2663.

Alabama Department of Transportation Bid and Performance Bond Form

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: