If you’re a contractor looking to grow your business and compete for public or large-scale private projects, you’ve likely encountered the terms “bid bond” and “performance bond.” These bonds aren’t just paperwork. They are essential tools that help you qualify for bigger jobs, earn trust, and protect your reputation.
Understanding how they work can give you an edge in a competitive bidding environment.
What Is a Bid Bond?
A bid bond is required when you submit a proposal on a government or large commercial construction project. It guarantees that if your bid is selected, you’ll accept the contract and provide the required performance bond.
Without a bid bond, your proposal may be rejected immediately. Most public agencies will not even consider your bid without one on file.
What Is a Performance Bond?
A performance bond protects the project owner by guaranteeing that you will complete the work as outlined in the contract. If you walk off the job or fail to meet specifications, the bond provides financial coverage so the owner can hire someone else to finish the work.
This bond is critical in public and high-value construction contracts. It shows that you are committed, capable, and backed by a licensed surety provider.
Why These Bonds Help You Win Work
Bid and performance bonds are often mandatory for federal, state, and municipal jobs. Many private developers also require them to reduce risk. When you are bonded:
You meet legal and contract requirements
You gain credibility with project owners and general contractors
You signal financial stability and professional reliability
Being bonded positions you as a serious, qualified professional.
How Much Do Bid and Performance Bonds Cost?
Bid bonds are typically free or included with your bonding program. Performance bonds usually cost between 1% and 3% of the contract value, depending on your credit, experience, and the size of the project.
For example, if you are awarded a $100,000 job, your performance bond premium may be $1,000 to $3,000. Many contractors include this cost in their bid.
How to Get Bonded Quickly
Getting bonded is easier than you might think. The basic process looks like this:
Submit a short application with your business and project details
Get matched with a bonding program that fits your profile
Receive a fast quote, get approved, and obtain your bond documents
Even if you’re new to public work or have limited bonding history, there are programs designed to help you qualify.
Final Thoughts
Bid and performance bonds aren’t just checkboxes—they’re essential tools that help you compete, build trust, and win better jobs. If you’re ready to step up to larger projects, getting bonded is the place to start.
Want to bid with confidence? Visit ContractorBonds.us to learn more and begin the process.