Construction Bond & Construction Bonds
Get construction bond solutions for contractors. Our surety bond construction services include performance, payment, and bid bonds. Complete bond construction expertise for all project types.
- Performance, payment, and bid bonds
- Treasury-certified carriers
- Construction bond specialists
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🔥 INFRASTRUCTURE BOOM - $550B DEPLOYED
Bonded contractors are capturing record projects while unbonded competitors wait on the sidelines. With $550 billion in federal infrastructure spending (40% already deployed), now is the time to get bonded.
— Karl Choltus, National Surety Practice Leader at Brown & Brown
3 Main Types of Construction Bonds
Bid Bonds, Performance Bonds, and Payment Bonds explained - the essential trio for construction projects
Learn about the three essential construction bonds that work together to protect all parties in construction projects: bid bonds for project bidding, performance bonds for project completion, and payment bonds for subcontractor protection.
Get Your Construction Bond QuoteEssential Construction Bonds
The three most common bonds required for construction projects
Guarantees the contractor will complete the project according to contract terms
Common Uses:
Ensures subcontractors and suppliers are paid for their work and materials
Common Uses:
Guarantees the contractor will honor their bid and provide required bonds if awarded
Common Uses:
Ready to Get Your Construction Bond?
Fast approval • Competitive rates • All project types
📋 Get Your Construction Contractor Bond Quote
Fast approval • Competitive rates
All Contract & Construction Bonds
| Bond Type | Bond Amount | Starting Rate | Risk Level | Action |
|---|---|---|---|---|
Performance BondPopular Guarantees the contractor will complete the project according to contract terms | 50% - 100% of contract value | $500 | Moderate | |
Payment BondPopular Ensures subcontractors and suppliers are paid for their work and materials | 50% - 100% of contract value | $500 | Low | |
Bid BondPopular Guarantees the contractor will honor their bid and provide required bonds if awarded | 5% - 20% of bid amount | $100 | Low | |
Maintenance Bond Guarantees defects will be repaired during the maintenance period | 50% - 100% of contract value | $300 | Moderate | |
Supply Bond Guarantees delivery of materials or equipment according to purchase agreement | 10% - 100% of supply value | $250 | Low | |
Subdivision Bond Guarantees completion of subdivision improvements like roads and utilities | 100% of improvement cost | $750 | High | |
Completion Bond Guarantees project completion if the original contractor defaults | 100% of remaining work | $1000 | High | |
Site Improvement Bond Guarantees completion of required site improvements and landscaping | 100% - 125% of improvement cost | $400 | Moderate | |
Right of Way Bond Guarantees restoration of public property after utility or construction work | Cost of restoration | $200 | Low |
Why Your Competitors Are Winning Bigger Contracts
Ernst & Young's research reveals unbonded construction projects that experience contractor defaults face 85% higher completion costs. Project owners know this—that's why bonded contractors get the calls for lucrative projects.
"In the last few years, FSB has provided over $100 million dollars of bonds for our projects. Our bonding capacity grew from $500,000 to $75 million through our surety partnership."
$100 million in bonds provided
"We changed to Unique Surety after being with a bonding agent for 5 years. Unique Surety arranged for much higher performance bonding limits at a much better rate which opened the door to greatly expanding our business."
Much higher limits at better rates
100% of construction default experts confirmed sureties have the expertise, tools, and resources to complete projects after contractor default—giving bonded contractors a massive credibility advantage.
— Construction Business Owner AnalysisWhat Construction Bonds Really Cost
700+ Credit Score
Excellent credit
1% or less
$250/year on $25k bond
650-699 Credit Score
Good credit
2-5%
$500-$1,250/year
600-649 Credit Score
Fair credit
3-7%
$750-$1,750/year
Below 600 Credit Score
Challenged credit
5-15%
Higher rates but solutions available
Pro tip: CPA-prepared statements often reduce premiums enough to offset accounting costs. Plus, monthly work-in-progress reports show you're a sophisticated operator, not a fly-by-night contractor.
Construction bonds protect project owners, subcontractors, and suppliers from financial loss if a contractor fails to complete work or pay their obligations. These bonds are often required for public works projects and large private contracts.
- Required for most public construction projects
- Protect owners, subs, and suppliers
- Often required as a set (bid, performance, payment)
- Bond amount based on contract value
Construction bonds require more extensive underwriting than license bonds. Bonding companies evaluate the contractor's experience, financial strength, and track record.
- Three years of financial statements
- Work-in-progress schedule
- Project experience and references
- Bank and trade references
"Most thorough academic treatment of surety bonds, covering all terminology, bond types, and practical applications"— Virginia Tech Construction Contracting Program
This comprehensive academic resource provides detailed coverage of construction bonds including bid bonds, performance bonds, and payment bonds. Perfect for contractors seeking in-depth understanding of bonding terminology, processes, and practical applications in construction contracting.
Read Virginia Tech Surety Bonds Chapter →Frequently Asked Questions
The main construction bonds include performance bonds (guaranteeing project completion), payment bonds (ensuring subcontractors and suppliers are paid), bid bonds (guaranteeing bid acceptance), maintenance bonds (covering defects during warranty periods), and supply bonds (guaranteeing material delivery).
Construction bond premiums typically range from 0.5% to 4% of the contract value, depending on credit score, project size, and risk level. For example, on a $25,000 bond, contractors with excellent credit (700+) pay around $250/year, while those with fair credit (600-649) pay $750-$1,750/year.
The essential trio includes bid bonds (required for project bidding at 5-20% of bid amount), performance bonds (guaranteeing completion at 50-100% of contract value), and payment bonds (protecting subcontractors and suppliers at 50-100% of contract value).
Bonding companies evaluate three years of financial statements, work-in-progress schedules, project experience and references, and bank and trade references. They assess your character, capacity (financial resources), and capital (working capital and net worth).
Construction bonds are required for most public works projects. Federal projects over $100,000 require performance and payment bonds under the Miller Act. States have similar requirements through Little Miller Acts, with thresholds ranging from $25,000 to $200,000 depending on the state.
Common Bonding Problems (And Real Solutions)
Covers up to $14 million for federal projects at just 0.6% additional cost. Set up an IRS payment plan first, then apply.
Contact SBA for Quick Program eligibilityProvide bonds for contracts up to $500,000 with minimal financials. Perfect for breaking into the bonded contractor ranks.
Start with license bond, build relationshipFunds control arrangements cost 0.5-1% of contract value but don't tie up your assets. Use cash, letter of credit, or real estate as collateral.
Explore collateral-backed bonding optionsGet your license bond, perform well, build a relationship with your surety. Within 2-3 years, you could be bonding million-dollar projects.
Begin with basic license bond todayNeed Construction Bonding?
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