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  • Writer's pictureChristian Collins

Bid Bonds for Contractors: A Comprehensive Guide

In the competitive landscape of construction and bonds come into the picture. In this article, we'll explore bid bonds, their significance, and the nuances that contractors should be aware of.

What is a Bid Bond?

A bid bond is a type of surety bond that acts as a guarantee that a contractor will stand by their bid at the quoted price. If a contractor fails to uphold their bid, the bond offers financial protection to the project owner. It's a safeguard for project owners, ensuring they aren't left at a disadvantage if a contractor reneges after winning a bid. Hence the bid bond percentage is the risk you take if you do not enter the contract and provide the required performance and payment bonds.

The Importance of Bid Bonds
  1. Protection for Project Owners: The primary role of a bid bond is to shield the project owner. If a contractor withdraws or doesn't honor their bid, the bond ensures that the owner isn't burdened with unforeseen expenses or delays.

  2. Promotes Genuine Bidding: With a bid bond in place, contractors are more inclined to present genuine and precise bids. It deters artificially low offers made with the intent of renegotiating later.

  3. Establishes Credibility: For contractors, possessing a bid bond communicates to project owners that they are dependable and committed to their bids. It fosters trust and can provide an edge during the bidding phase.

The Real Cost of Bid Bonds

Here's the good news: bid bonds are free. Contractors only incur charges when a performance and payment bond is required. However, it's crucial for contractors to factor in the cost of the performance and payment bond in their bids. This ensures they don't bear that expense if they're awarded the contract.

Partnering with the Best

We collaborate with over 80 A-rated sureties, ensuring that contractors have access to the best in the business. This vast network allows us to offer a range of options tailored to individual needs.

The Application Process: Simple to Comprehensive

The application process for bid bonds is designed to be as streamlined or detailed as needed:

  • For requirements under $750,000, contractors can benefit from a concise 2-page application.

  • For needs exceeding this amount, a more comprehensive application process is in place to ensure all aspects are covered.


Bid bonds are an indispensable asset for both contractors and project owners. They guarantee a transparent bidding process, shield project owners from unforeseen complications, and help contractors demonstrate their reliability. If you're a contractor gearing up to bid on projects, understanding the intricacies of bid bonds is crucial. Remember, while bid bonds come at no cost, always account for potential performance and payment bond expenses in your bid. This foresight could be the key to securing your next significant contract.


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