Contractor bid bonds

Bid Bonds: Your Gateway to a Surety Line

A bid bond doesn't cost your company anything to submit. What it does is start the process of getting your company approved for the surety line you'll need to win, and complete, contracts, so you're not caught off guard when the performance bond is suddenly due.

Apply for Your Bid Bond Calculate Your Performance Bond
Bond basics

What Is a Bid Bond?

A bid bond is a guarantee submitted with a contractor's proposal on a construction project, assuring the project owner that if the contractor wins the bid, they'll enter the contract and provide the required performance and payment bonds.

Three parties are involved in every bid bond: the principal (the contractor submitting the bid), the obligee (the project owner requiring the bond), and the surety (the company backing the guarantee). If the winning contractor fails to sign the contract or provide the required bonds, the surety may be responsible for the difference between that bid and the next-lowest qualified bid, up to the bond amount.

Bid bonds are most often required on:

Public works contracts

State and municipal construction projects that require bonded bidders.

Federal contracts

Projects subject to the Miller Act's bonding requirements.

Institutional projects

School district and public university construction work.

Have a question about whether your project requires a bid bond? Call (855) 470-4341 to speak with a bond expert.

Why there's no cost

Why Don't Bid Bonds Cost Anything?

The bid bond itself isn't the product. Sureties don't charge a premium for it because the real underwriting work, and the real value to your company, happens when a bid is won and the performance bond is issued.

Submitting for a bid bond is really an application to be underwritten for a surety line: a pre-approved bonding capacity tied to your company's financial strength, work history, and creditworthiness. Once that line is in place, you know your bonding capacity before you bid, instead of finding out after you've already won the job.

The bottom line

Submitting for bid bonds early, even before you have a specific project lined up, is how contractors build a bonding relationship and avoid getting caught without approval when a performance bond is suddenly required.

Know the difference

Bid Bond vs. Performance Bond vs. Payment Bond

These three bonds work together across the life of a contract, but each one covers a different obligation and is required at a different stage.

Bid Bond Performance Bond Payment Bond
When it's needed At time of bid submission After contract award After contract award
What it guarantees Contractor will honor their bid and provide required bonds if awarded Contractor will complete the project per contract terms Subcontractors and suppliers will be paid
Typical cost No cost Premium based on contract value and underwriting Often issued with no additional premium when bundled with the performance bond
Who requires it Project owner, as part of the bid package Project owner, upon award Project owner, upon award, often paired with the performance bond
Getting approved

How Do Contractors Get Approved for a Surety Line?

Approval isn't a same-day transaction. It's a relationship built on a review of your company's financial and operational standing.

1

Application & background

Years in business, scope of work, and licensing are reviewed alongside your bid bond request.

2

Financial & work history review

Financial statements, work-in-progress schedules, bank or credit references, and completed project history.

3

Underwriting decision

The surety sets your bonding capacity, or surety line, which determines the maximum contract size you can bid and be bonded for.

Pro tip: you don't need an active bid in hand to start this process. Getting pre-qualified for a surety line before you need one means you can bid with confidence and won't be caught off guard later.

Start Your Pre-Qualification
Plan ahead

Estimate Your Performance & Payment Bond Premium

Once you win a bid, the performance and payment bond premium is based on your contract and project terms. Enter your project details below for a quick estimate, so you know roughly what to expect before that bond is due.

Performance & payment bond cost estimator

Get a Quick Premium Estimate

This is an estimate only. Final pricing is subject to underwriting review of the contractor and the project.

Estimated Premium
$0.00
Submit Your Project
Is this you?

Who Needs a Bid Bond?

Bid bonds come up across a wide range of contracting work. You likely need one if you fall into any of these groups.

  • Public works biddersContractors bidding on state or municipal construction projects.
  • Federal contractorsContractors bidding on federal work subject to Miller Act bonding requirements.
  • Institutional biddersContractors responding to school district or public university construction RFPs.
  • Anyone planning aheadContractors who want to know their bonding capacity before they submit a bid.
The Jet difference

Why Choose Jet?

Jet combines fast bid bond turnaround, experienced surety professionals, and a straightforward path toward your full surety line.

  • No-cost bid bondsSubmit for a bid bond without a premium charge.
  • Direct underwriting relationshipBuild a surety line directly, without unnecessary middle layers.
  • Experienced underwritersComplex submissions get hands-on review from surety professionals.
  • In-house customer serviceGet help with documents, billing, and account changes.
  • In-house claims handlingA direct point of contact throughout the claim process, if one arises.
  • Support at every stageFrom your first bid bond through your performance bond and beyond.
Frequently asked questions

Bid Bond FAQs

Does a bid bond cost money?

No. Bid bonds are typically issued at no cost to the contractor. The underwriting focus is on establishing your overall bonding capacity, which is used when the performance and payment bonds are issued after a contract is awarded.

What percentage is a typical bid bond?

Bid bonds are most commonly issued at 5%, 10%, or 20% of the total bid amount, depending on what the project owner requires in the bid specifications.

What happens if I win the bid but can't get the performance bond?

If a contractor is unable to provide the required performance bond after winning, the surety may be liable to the project owner for the difference between that bid and the next-lowest responsive bid, up to the bond amount. Establishing your surety line before bidding reduces the risk of this situation.

How long does bid bond approval take?

Timing varies with the completeness of your financial documentation and the complexity of your work history. Contractors with an established surety line can often receive bid bonds quickly once that line is in place.

What credit score do I need for a bid bond?

Credit is one factor among several, including financial statements, work history, and references, that underwriters review. There's no single minimum score; each application is evaluated as a whole.

Can I get pre-qualified for a surety line without an active bid?

Yes. Many contractors start this process proactively so they know their bonding capacity in advance, rather than applying for the first time under bid deadline pressure.

Related bond types

Types of Construction Bonds Related to Bid Bonds

Aside from the Bid Bond used to show a project owner that a contractor has a surety company willing to back their proposal, there are several other bond types contractors may need before, during, and after a project.

Performance Bond - Once awarded a contract, a Performance Bond is often required to guarantee the project duties are completed according to the contract terms. Submitting for a Bid Bond and establishing your surety line is the first step toward getting approved for this bond.

Contractor License Bond - some states require a Contractor Bond to be on file for the entire duration the contractor is licensed and operating. For example, the California Contractors State License Board (CSLB) requires a $25,000 surety bond for all contractors. California has several other bond requirements for contractors, depending on the contractor's classification and other factors.

Payment Bond - A Payment Bond is often required alongside a Performance Bond. While the Performance Bond is used to ensure all work is completed according to the contract, the Payment Bond helps reassure the obligee that all materials and labor will be paid.

Subdivision/Site Improvement Bond - Similar to a Performance Bond, a Subdivision Bond ensures public works improvements will be made by the developer according to the law. The obligee is typically a city or county government. Landowners/developers secure these bonds in situations where improvements involve sidewalks/rights-of-way, streets, sewers, electrical lines, etc.

Maintenance Bond - A separate bond is sometimes required on public projects that provides coverage for defects and faults for a specified amount of time after project completion. Typically, these coverages are included as part of the original contract.

Supply Bond - Supply Bonds are used to guarantee the delivery of materials from the supplier. Contractors should not typically be asked to provide this bond since it relates directly to the supplier.

Ready to get bonded?

There's no cost to apply, and no obligation to bid on a specific project first. Get your company pre-qualified for a surety line today.

Call (855) 470-4341 or email [email protected] with any questions. We're happy to help.

Apply Now

Notary Bond Application:

X

Business Information:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Employee Dishonesty Bond Application:

Business Information:

Business Description:

Coverage Requirements:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Contract Bond Application:

X

Business Information:

Owner Information:

Job Details:

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information:

Worker's Compensation Application:

X

Business Information:

Business Description:

Coverage Requirements

Indemnity Agreement:

I, the undersigned, hereby apply for a Dishonesty Bond also known as a Business Service Bond or Janitorial Service Bond (“bond”) to the Surety Company (“SURETY”) through Jet Insurance Company (“JET”), with whom I hereby grant the authority to act on my behalf with respect to the bond and assign as my Broker of Record, and declare that the statements herein are true and correct. In consideration of the SURETY issuing, renewing or substituting said bond(s), I, individually and as the owner or officer of the bonded entity, hereby understand and agree, as follows: (i) to reimburse, hold harmless, and indemnify SURETY upon demand for all loss, liability, claim, expense, including but not limited to attorneys’ fees, expert’s fees, investigative fees and claims handling fees, and any other cost which SURETY shall pay or incur in defense, adjustment, or settlement of such claims/suits by reason of such suretyship; (ii) that an itemized statement of loss and expenses by SURETY shall be indisputable proof of my liability to SURETY; (iii) coverage is subject to a $100 deductible; (iv) the employee must be convicted before coverage will apply (v) performance and any form of dispute resolution of this agreement shall take place in the county of SURETY's office of service; and (vi) a facsimile copy or electronically signed version of this agreement shall be binding as if it were an original. This agreement shall survive any changes in, substitute to or renewal of the bond(s).

Required Effect Date of Bond Policy:

Contact Information: