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Bid Bonds

Find out if you qualify for Bid Bonding!


  • How much does a bid bond cost?
  • For smaller accounts, they are a nominal flat fee per bond or per year basis. For larger accounts, they are free of charge. Watch our video "What Do Bid and Performance Bonds Cost?"

  • How do I qualify for bonding?
  • Not everyone does. You can apply on our website and find out if you qualify. Smaller contractors are underwritten strictly on the owner(s) personal credit. Underwriters consider credit strength, experience, the type of work being performed and financial strength for larger contractors.

  • I only need a bond for 10% of the contract. Will the bond cost less?
  • No. Contract bonds are underwritten on the full contract amount, as the liability to the surety is based on the total scope of work. Otherwise, there is no way to determine what portion of the contract is bonded.

  • What is the difference between bid bonds and performance bonds?
  • A bid bond is a guarantee that you will provide a performance bond should you be awarded the job. A performance bond is a guarantee that the contractor will not default on the contract.

  • Where can I get a bid bond form?
  • We have the standard AIA bond forms on file. However, if the obligee has their own specific language on the bond forms, you will need to obtain the forms from them.

  • How do bid bonds work?
  • Bid bonds are submitted along with your proposal to the job owner. If you are the low bidder, you usually will have to provide a performance bond to start the contract. Bid proposals without a valid bond included are rejected. Watch our video "How Do Bid and Performance Bonds Work?" for further information.

  • Do bid bonds turn into performance bonds?
  • Usually no, they are separate. However, Ohio is an example where bid bonds automatically become a performance bond if the contractor is awarded the contract.

  • Can I get a bid bond with bad credit?
  • It is possible with minor credit flaws. However, it is not possible with major credit issues. Smaller contract accounts are based strictly off of credit and there are currently no high risk bid bond programs. Larger contract accounts with strong CPA business financials may be able to get approved if the owners have personal credit flaws.

  • Can I get construction bid bonds for a new business?
  • Yes. However, your credit must be adequate and you will be limited to smaller bonds unless you have extensive previous experience and a good deal of equity within the company. You can apply for bids bonds online and see if you qualify for bonding.

  • What is a bond line?
  • It is the amount of bonds the surety will allow a contractor to have at any one time and includes single and aggregate limits. The single limit is the largest bond a contractor qualifies for, for one particular job. The aggregate limit is the total amount of bonded work on hand a contractor can have at once for multiple jobs.

  • Why do you need my spouse's information?
  • Your marriage legally joined your assets with your spouse. The surety will require you to personally guarantee to reimburse them in the event of a valid claim. Your spouse will also have to personally indemnify on your behalf to ensure they are on board with pledging your shared assets. Bonding companies also use spousal indemnification to get an indication of your character. If your spouse will not guarantee you, neither will they.

  • Still have questions? Visit our education center or ask us now!

How Much Are Bid Bonds?

For smaller accounts, it is a small fee on a per bid basis. There is also an option of paying a one-time fee for unlimited bids for the calendar year. Bid bonds are free of charge for larger accounts.

What Is A Bid Bond?

It is a guarantee that the items in a submitted bid are complete and accurate. In addition, if a performance bond is required by the obligee, it also guarantees a performance bond will be written by the surety, and that those awarded the contract will purchase the bond. Visit our performance bond page to find out more information about performance bonds.

Bid Bond Definition: A contract surety bond that guarantees the items in a submitted bid are accurate and complete.

Set up a Bid Surety Bond line

How To Qualify For A Bid Surety Bond

Not everyone qualifies, as suretyship is a form of credit and underwriting guidelines change based on the size of the contract. Smaller contracts, about $400K and under, are underwritten on personal credit of the owners. It is possible to qualify with minor credit issues; however, there are no bad credit markets available for individuals with major credit problems.

Underwriting for larger contracts requires a more detailed review, which includes business financial statements, experience in the industry, banking records, supplier references, financial statements and the owners' personal credit.

It is important to work with a construction CPA to ensure your financial statements are properly prepared and presented to qualify for larger contracts. Watch our video to find out how to increase your contractor bonding capacity.

Working with a professional surety agent is also crucial. Going to a P&C insurance agency is not wise, unless they have surety experts available. Good surety agencies have direct access to the best markets allowing for the lowest rates, and are able to work with your CPA to present your company appropriately. Check out our video to find out how to get lower construction bond rates.

Kristina Hannon Smith (Thu, 03 Nov 2011 20:54:57 -0400): What happens if you (being the bid bond company) makes the mistake? My bid is good, all my numbers add up; I send my information to you and instead of you putting the 10%, you put a number obviously significantly less than 10%. Such as a 2.4 million dollar bid, you place $10,000 instead of 10% ($240,000). My bid thus gets rejected. Can I fight that, or am I at a loss?Butch Obermier (Fri, 13 Jan 2012 14:23:16 -0500): I am bidding on a job that's in the 10000 range and I want to get a bid bond, what's the cost of the bids... if I get the bid bond and then a performance bond does that money carry over or I lose it..... yes I have never done this be4 and don't have a clue...Shannon Patrick Koller (Wed, 14 Mar 2012 22:30:22 -0400): I'm sure that by now you have already bid the job and hopefully got it...but the cost of the bonds are not refundable... Just FYI..Vickie Kiser (Wed, 21 Mar 2012 13:39:35 -0400): Id like to start my own small facility and residential cleaning business....what do I need to get started and how much $?Leslie Maldonado (Thu, 10 May 2012 07:47:29 -0400): There are women groups that support small business and help with start up cost. You need proposal, long and short term goals. This includes projected profit , possible cost, etc. Good luckBekele Kassa (Thu, 12 Jul 2012 09:32:12 -0400): Having a sucessful business is very important , because it lead to time freedom, money freedom and mind freedom.Lisa Kibler (Thu, 16 May 2013 12:11:32 -0400): I had a customer ask what our bond rate is.... what does that mean and how is that determined?

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