Guaranteeing Performance in Construction
Contract bonds (also called construction bonds) are surety bonds required for construction and building projects. These bonds protect project owners, whether government agencies, private developers, or commercial clients by guaranteeing that contractors will fulfill their contractual obligations.
Contract bonds provide financial assurance that:
For contractors, contract bonds demonstrate financial stability and credibility, opening doors to larger and more profitable projects, especially public works contracts that legally require bonding.
Contract bonds are essential for contractors working on bonded projects. Common scenarios include:
Federal, state, and local government projects almost always require contract bonds under laws like the Miller Act (federal) and Little Miller Acts (state).
Private developers, corporations, and property owners increasingly require bonds for large commercial, industrial, and residential projects.
Prime contractors often require subcontractors to post bonds to guarantee their portion of the work and protect the overall project.
General contractors bidding on competitive projects need bonding capacity to demonstrate financial strength and qualify for larger contracts.
Whether you’re bidding on your first bonded project or you’re an established contractor looking for better rates and service, our streamlined process gets you the bonding capacity you need.
Contact us to discuss your bonding needs. We’ll review your experience, financials, and project details to determine the best bonding strategy for your business.
Complete our contractor bond application. We’ll review your financial statements, work history, and current projects. Our relationships with multiple A-rated sureties help us find the best fit.
Once approved, we establish your bonding capacity, the maximum amount you can have bonded at one time. This “bonding line” allows you to bid on multiple projects.
For each project you bid on or win, we issue the specific bonds needed, bid bonds, performance bonds, payment bonds. Most bonds are issued within 24-48 hours.
New contractors typically start with $250,000-$500,000 in single project capacity, depending on financials and experience. As you complete bonded projects successfully and strengthen your financial position, capacity increases over time.
You need a bid bond for every bonded project you bid on. Once awarded a contract, the bid bond is replaced by performance and payment bonds. However, once you establish bonding capacity, obtaining bonds for individual projects is straightforward.
Initial bonding program setup (establishing capacity) takes 1-2 weeks including financial review and underwriting. Once your program is in place, individual bid bonds can be issued same-day, and performance/payment bonds within 24-48 hours.
Contract bonds are more challenging with poor credit, but options exist. Start with smaller projects, consider SBA bonding programs for disadvantaged contractors, or bring in a principal with stronger financials. We'll work with you to find solutions.
Yes, though capacity will be limited initially. We look at the owner's experience, personal financials, and track record, even if the business is new. Many contractors start with small bonding capacity and grow from there.
Single project capacity is the maximum bond amount for one project. Aggregate capacity is the total bonded work you can have in progress at once. Example: $1M single/$2M aggregate means you can have a $1M project or two $500K projects running simultaneously.
Typically no. Bid bonds are usually issued at no cost in anticipation of writing the performance and payment bonds if you win the contract. You only pay premiums when the contract is awarded.
Court bonds provide financial protection in legal proceedings by ensuring individuals fulfill court-ordered obligations. Whether appealing a judgment, filing an injunction, or securing property during litigation, court bonds help move cases forward while safeguarding all parties involved.
Probate bonds ensure that executors, guardians, trustees, and other fiduciaries manage estates and assets responsibly. These bonds protect heirs, beneficiaries, and vulnerable individuals from mismanagement, loss, or misuse of funds during estate or guardianship administration.
License and permit bonds help businesses meet state and local regulatory requirements across a wide range of industries. They ensure companies operate ethically, follow industry laws, and provide protection to consumers and government agencies from noncompliance or financial loss.
Whether you’re bidding on your first bonded project or seeking to increase your bonding capacity, ABC Surety Bonds provides the expertise, carrier relationships, and support to help your construction business succeed.
