Bond Type Guide
Bid Bonds
A bid bond guarantees that a contractor will honor their bid and enter into a contract if awarded the project.
What is a Bid Bond?
A bid bond is a type of surety bond that guarantees a contractor will honor their bid price if selected for a project. It protects the project owner (obligee) from losing money if the winning bidder fails to enter into the contract at the bid price.
How Much Does a Bid Bond Cost?
Bid bonds are typically free or very low cost (often included as part of a bonding line). The bond amount is usually 5-10% of the total bid amount. The premium is minimal because the surety company views the bid bond as a precursor to the performance and payment bonds.
Who Needs a Bid Bond?
How to Get a Bid Bond
2. Provide financial statements and project details
3. The surety evaluates your qualifications
4. Bond is issued (often same-day for pre-qualified contractors)
Other Bond Types
Performance Bonds
A performance bond guarantees that a contractor will complete a project according to the terms of the contract.
Payment Bonds
A payment bond guarantees that a contractor will pay subcontractors, laborers, and material suppliers.
License & Permit Bonds
License and permit bonds are required by government agencies to obtain or maintain a business license.
Court Bonds
Court bonds are required by courts during legal proceedings, including appeal bonds, guardianship bonds, and fiduciary bonds.
Fidelity Bonds
Fidelity bonds protect businesses against employee dishonesty, theft, and fraud.
Commercial Bonds
Commercial surety bonds encompass a wide range of bonds required for business operations beyond construction.