Bond Type Guide
Performance Bonds
A performance bond guarantees that a contractor will complete a project according to the terms of the contract.
What is a Performance Bond?
A performance bond is a surety bond that guarantees the contractor will complete the project according to the terms and conditions of the contract. If the contractor fails, the surety company steps in to ensure the project is completed.
How Much Does a Performance Bond Cost?
Performance bond premiums typically range from 1-3% of the contract value. The exact rate depends on the contractor's financial strength, experience, and the project size. For a $1 million project, expect to pay $10,000-$30,000.
Who Needs a Performance Bond?
Other Bond Types
Bid Bonds
A bid bond guarantees that a contractor will honor their bid and enter into a contract if awarded the project.
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.