Contractor's Bond Guide

Simply put, it means you are bonded with contractor bonds needed for public construction jobs, a contractor license bond required to get your license based on your geographic location or a fidelity bond that protects against employee theft.

You’ll find information on the three different types of bonding for contractors and how to obtain the bonds below.

If you’re still deciding what kind of contractor you want to be, take a look at our step-by-step guide to becoming a contractor. You can also take a look at the most frequent surety bond related questions here.

Contract bonds are required if you want to perform work on public projects (and some private as well) to ensure jobs will be completed properly. They can be required by the owner themselves or a general contractor that hired you as a sub-contractor.

Contract bonding is required for any job exceeding $100,000 due to the Miller Act. You can read our in-depth construction bond guide to learn everything from the process of getting a contract bond to increasing your bond lines.

Bid Bond - Allows you to bid on bonded jobs and protects the public.

Performance Bond - This lets you perform work on a project once you are awarded the job.

Payment Bond - Ensures that you’ll pay all laborers, sub-contractors and suppliers.

Maintenance Bond - Allows you to work on a job that requires a warranty on your workmanship.

Supply Bond - This allows you to work on projects that require you to deliver materials.

We created a comprehensive guide which explains everything you must know in order to bid on and win projects. The topics covered in the e-book include:

• The pros and cons of bidding on public construction projects
• Bid solicitation procedures
• What influences the bid process
• How to bid on public projects
• Surety bonds for bidding and construction
• Why you need to understand bond claims

This e-book was created with to help contractors successfully navigate the process of bidding and winning public construction projects.

The owner of a job will often require a bond of their general contractors. If you’re a G.C. required by the owner to get contractor’s bonding, it is recommended that you in turn require bonds of your sub-contractors to guarantee their work performance and payment of all workers and suppliers.

This program is meant to help smaller and emerging contractors get bonded for larger jobs when they have had trouble elsewhere. Take a look at our SBA bond guide to learn about the requirements and how to get SBA bonds.

A contractor’s license bond is needed to get a license based on where you perform the work. The bond ensures you follow the rules and regulations of your license.

Bonding costs are not one size fits all. They vary greatly depending on what type of bond you are posting, the contract bond rate that applies to you, and the size of the bond. You can use our surety bond premium calculator to get an instant ballpark estimate.

However, not everyone qualifies for contractors bonds. If you want to see if you qualify for the bond you need and determine the costs associated with it, you’ll need to obtain a firm quote.

If you are required to post a contractor’s surety bond, we highly recommend you read our "what is a surety bond?" guide to find out how they work. The majority of people who post a surety bond are unaware that they are responsible to pay the bonding company back for claims.

With that said, it’s important that you work with the right contractor bonding companies, as many won’t properly defend you in the event of a claim.

You can also learn more in our general guides about the differences between getting bonded and insured and what it means to be bonded.

Fidelity bonds are very different from the contract and license bonds mentioned above, as they are an insurance product that protect you or your customers against employee dishonesty such as theft.

Fidelity bonds are usually optional to obtain, but are also required at times (e.g. employee benefit plan theft protection). Getting contractor bonding insurance through fidelity bonds is something all contractors should consider.

Our company has bonded thousands of construction projects over the years. You can take a look at some of our most notable bonded projects here. Keep in mind, it's crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.

There are several types of insurance coverages that are recommended for contractors, but the recommended coverage will vary based on your operation.

If you’d like to learn more about all of the insurance coverages available to you, please read our contractor insurance guide.