Surety bonds are three-party agreements that guarantee your business will fulfill its contractual or legal obligations. Unlike insurance (which protects YOU), a surety bond protects the party you're doing business with — the project owner, government agency, or client. If you fail to perform, the surety pays the claim and you repay the surety. Bonds are required for government contracts, licensing, and many private projects. Our agency provides fast surety bond placement for contractors and businesses.
General contractors bidding on government or large private projects, subcontractors required to bond by GCs, businesses needing license or permit bonds, developers, suppliers, and any business required to provide financial guarantees of performance to clients or government agencies.
A bid bond is a contract surety bond submitted with a bid on a construction project. It guarantees that if you are awarded the contract, you will sign it and furnish the required performance and payment bonds. If you back out, the obligee can claim the difference between your bid and the next-lowest bid, up to the bond's penal sum (typically 5–10% of the bid).
Federal, state, and municipal construction projects; many private GCs and developers; design-build and CM-at-risk solicitations.
A performance bond guarantees that the contractor will complete the project according to the contract terms, plans, and specifications. If the contractor defaults, the surety must either complete the work, pay another contractor to complete it, or pay damages up to the bond's penal sum (almost always 100% of the contract value). Performance bonds are the cornerstone of contract surety and are required on every federal project over $150,000 by the Miller Act.
Federal/state/municipal construction over $150K; private commercial projects; large subcontracts; LEED and design-build contracts.
A payment bond guarantees that subcontractors, laborers, and material suppliers will be paid for their work on the bonded project. On federal jobs, it gives subs and suppliers a payment remedy because they cannot file mechanic's liens against federal property. Payment bonds are almost always issued in tandem with performance bonds (referred to together as 'P&P bonds') and underwritten as a single transaction.
Federal contracts over $150K (Miller Act); most state and municipal projects (Little Miller Acts); private projects where the owner wants to reduce lien risk.
License and permit bonds are commercial surety bonds required by a state, county, or municipal government as a condition of issuing a business or professional license. They guarantee that the licensee will comply with applicable laws, codes, and regulations governing their occupation. Common examples include contractor license bonds, auto dealer bonds, mortgage broker bonds, freight broker BMC-84 ($75K), notary bonds, and tobacco/alcohol bonds.
Anyone applying for or renewing a regulated business or professional license. In Florida: contractors (DBPR), auto dealers (HSMV), mortgage brokers (OFR), motor vehicle dealers, and many municipal trades.
Court bonds (also called judicial bonds) are required by a court of law to protect parties from financial loss caused by a court-ordered action. They divide into two main categories: judicial bonds (filed during litigation, such as appeal bonds, injunction bonds, attachment bonds, and replevin bonds) and fiduciary bonds (filed by a person acting on behalf of another — executor, administrator, guardian, conservator, or trustee). Court bonds are usually required on short notice and underwritten on credit.
Litigants pursuing appeals or injunctions; executors and administrators of probate estates; court-appointed guardians and conservators; parties recovering disputed property.
Surety bond premiums are typically 1–3% of the bond amount for well-qualified applicants. A $100,000 performance bond might cost $1,000–$3,000. Applicants with poor credit or limited experience may pay 5–15% through high-risk surety markets.
Insurance protects you (the policyholder) from loss. A surety bond protects the other party (the obligee) — if you fail to perform, the surety pays the claim and you're required to reimburse the surety. Bonds are a form of credit, not insurance.
Sureties evaluate three things: credit (personal and business), capacity (experience and resources to complete the work), and capital (financial strength shown in financial statements). We work with sureties who handle contractors at all levels, including those building their bonding capacity.
A bid bond guarantees that if you win a project bid, you will enter the contract and provide the required performance and payment bonds. It's required on virtually all public bids over $100K–$250K. Premium is usually a flat fee ($100–$500) or 1–2% of the bid amount.
A performance bond protects the project owner if you fail to complete the contract. A payment bond protects subcontractors and suppliers from non-payment. They are almost always issued together (often called 'P&P bonds') and required by the Miller Act on federal projects over $150K.
A license bond is a commercial bond required by a state, county, or city as a condition of holding a professional license (contractor, auto dealer, mortgage broker, freight broker BMC-84, etc.). It guarantees you'll comply with the laws governing your license. Premium is typically 1–3% of the bond amount.
Court bonds are judicial or fiduciary bonds required by a court — appeal bonds, injunction bonds, probate/executor bonds, guardianship bonds, and replevin bonds. They guarantee you'll fulfill your obligations to the court or to a protected party. Premium varies widely by bond type and credit.
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