Whatever your need, it's important to know about all aspects of the surety bonds process. Whether it be a commercial surety bond, a contract bond, or some other type of surety bond, we can issue over 25,000 types of surety bonds. Any federal government construction project that exceeds $100,000 is required to have a performance bond.

What is a surety bond?
A surety bond serves as more of a financial guarantee than it does like an insurance policy protecting the consumer financially in the event of any wrong doing or fraudulent practices on account of you, the contractor.

Why do you need a surety bond?
A surety bond is often required of you to either get a license or permit or to secure a construction contract with a contract bond. In the case of a contractor license bond it is generally a requirement by the state or municipality you intend to do business in. For contract surety bonds, like performance and bid bonds, the bond will generally be required by whoever is securing the contract.

In the case of government contracts, the Miller Act requires a contractor on any federal project that exceeds $100,000 to post two bonds: a performance bond and a labor and material payment bond.

What does a surety bond cost?
Since a surety bond acts a financial guarantee credit score and individual and business financials are taken into account in the underwriting process. For many contractor license bonds you will not be required to submit to either of these underwriting tools. However, for larger bonds they will be required before a bond can be issued.

To be considered for a standard market you will need to have one or more of the following: 3 or more years in business, a 650 or higher credit score, and in some cases a business and personal financial statement. If you are eligible for a standard market you should expect a annual premium between 1% and 3% of your bond amount.

If you do not meet the standard market criteria we can submit your bond application to one of our exclusive non-standard markets. In a non-standard market you should expect an annual premium between 5% and 15% of your total bond amount required.

Benefit Partner Contact: SuretyBonds.com (800) 308-4358