Bid Bond

Please choose from the options below to apply:

Option One: For bonds above $350,000, or for more difficult guarantees, the Standard Application is required.
Option Two: Please review the Express Bond Application page to review our express application requirements.

What is a Bid Bond?

Construction projects normally require the a contractor to submit a bid bond to assure the owner (private, local, state, federal) that they are qualified to perform the project under consideration. The surety’s evaluation is arrived at after carefully considering the construction firm’s  financially capacity, project experience, key people that will perform the work, adequate equipment, current backlog of work and an available bank  line of credit. The purpose of a bid bond is to assure the owner that if the contractor is awarded the project, the contractor will enter into a contract and provide performance and payment bonds (contract bonds). If any of these conditions are not fulfilled, the project owner can forfeit the bid security. Although it’s a minor amount, usually 5% of the bid, all  underwriting takes place at this level because this is the “pre-qualification phase” and the bid bond  guarantees that final bonds (performance and payment) will be furnished.

Bid bonds are used as security for bids submitted on a contract proposal. Particularly on government projects, which are funded by the tax payer and required under the Miller Act and locally by similar acts referred to as “Little Miller Acts.  It’s also very common to have private owners and lenders on construction projects require bid and contract bonds for their respective protection.