Skip to main content
BSB

Complete Guide to Contractor Bonds

What are contractor bonds?

Contractor bonds include license bonds ($100-$300/year) required for legal operation and contract bonds (0.5-4% of contract value) required for specific construction projects. Most contractors need license bonds to operate and performance/payment bonds to bid public work over $150,000 under the Miller Act.

License & Contract Bonds
A- Minimum Rating
Fast Approval
Licensed & Insured Agents
⚡ Quick Response Guaranteed
Get Your Surety bond Quote
Compare quotes from multiple A- minimum rated providers

Which describes your situation best?

Instant Bonds Available
24-hour approval
A- minimum rated carriers
Treasury Certified
Licensed in 50 States
Instant to 5-Day Approval

Understanding Contractor Bond Types

"Contractor bonds" is an umbrella term covering two distinct categories with different purposes and requirements.

Contractor License Bonds
Commercial/License Bonds

Required for legal operation as a licensed contractor

  • Follows you to every job you work
  • Protects consumers from fraud & violations
  • Renewed annually (continuous requirement)
  • Instant approval available (most states)
Learn About License Bonds →
Performance & Payment Bonds
Contract Bonds

Required for specific construction projects

  • Project-specific (expires when project completes)
  • Protects project owners & subcontractors
  • Required for federal work over $150K
  • Always requires underwriting (1-5 days)
Learn About Contract Bonds →

Contractor Bond Types Explained

Each bond type serves a distinct purpose in your contractor career

Contractor License Bonds
⚡ Instant

Required to legally operate as a licensed contractor. Guarantees compliance with state licensing laws and protects consumers from fraud and incomplete work.

Bond Amount
$5,000 - $100,000
Typical Cost
$100-$300/year
Learn More About Contractor License Bonds →
Performance Bonds

Project-specific bonds guaranteeing you complete construction contracts according to terms. Required for federal projects over $150K and many state/private projects.

Bond Amount
100% of contract value
Typical Cost
0.5-4% of contract
Learn More About Performance Bonds →
Payment Bonds

Protects subcontractors and suppliers, ensuring they get paid even if the general contractor defaults. Often required alongside performance bonds.

Bond Amount
100% of contract value
Typical Cost
0.5-2% of contract
Learn More About Payment Bonds →
Bid Bonds

Pre-contract guarantee that you'll accept the job if you win the bid and can secure performance/payment bonds. Required for most public contract bidding.

Bond Amount
5-20% of bid amount
Typical Cost
Often free with contract bonds
Learn More About Bid Bonds →

Contractor License Bonds by Trade

Specialized bonds for specific trades and contractor types

General Contractor

Learn More →

Electrical Contractor

Learn More →

Plumbing Contractor

Learn More →

HVAC Contractor

Learn More →

Roofing Contractor

Learn More →

More Trades

View All Trades →

How to Get Your Contractor Bond

Simple application process with fast approval

1

Apply Online

Complete our simple application with your business details

2

Get Approved

Instant approval for license bonds, 1-5 days for contract bonds

3

Start Working

Receive your bond and begin bidding on projects

Frequently Asked Questions

What is the difference between contractor license bonds and performance bonds?▼
Contractor license bonds are required to legally operate and follow you to every job, protecting consumers from licensing law violations. Performance bonds are project-specific, guaranteeing you complete individual contracts per terms and protecting project owners. Most contractors need both—license bonds for legal operation and performance bonds for specific projects.
Do I need both types of contractor bonds?▼
Yes, typically. License bonds are required to get and maintain your contractor license (ongoing requirement). Performance and payment bonds are required for specific projects, especially public work over $150,000 or private projects where owners demand protection. License bonds let you operate; contract bonds let you bid bigger projects.
Can I get contractor bonds instantly?▼
Contractor license bonds up to $25,000 qualify for instant approval with no credit check in most states (California requires underwriting). Performance bonds, payment bonds, and bid bonds always require underwriting with 1-5 business day approval depending on contract size and your financials.
How much do contractor bonds cost?▼
License bonds typically cost $100-$300 annually for bonds up to $25,000 with good credit. Performance and payment bonds cost 0.5-4% of the contract value annually—for example, a $500,000 project might cost $2,500-$20,000 depending on your credit, experience, and financial strength.
What do contractors need to get bonded?▼
For license bonds: basic business information (instant approval). For performance/payment bonds: 3 years financial statements, work-in-progress schedules, resume of experience, project details, and bank/surety references. Strong financials and credit scores above 680 secure best rates.
Official Government Resources
Miller Act - Federal Acquisition Regulation (40 U.S.C. §§ 3131-3134)
Federal law requiring performance and payment bonds for construction contracts exceeding $150,000
U.S. Department of Treasury - Surety Bond Program
Official list of Treasury-certified surety companies authorized to write federal bonds

Ready to Get Bonded?

Whether you need a license bond to start operating or contract bonds to bid major projects

Licensed & Insured Agents
⚡ Quick Response Guaranteed
Get Your Surety bond Quote
Compare quotes from multiple A- minimum rated providers

Which describes your situation best?

Instant Bonds Available
24-hour approval
A- minimum rated carriers
Written by BuySuretyBonds.com
Licensed surety bond agency operating nationwide with direct integrations to Treasury-certified surety carriers. Our platform enables instant approval for license and notary bonds, with 24-48 hour underwriting for commercial bonds. All content is researched from official state and federal sources (.gov) and reviewed by licensed insurance professionals.
Verify insurance producer licenses →