CONTRACT SURETY BONDS

CONTRACT BONDS

A contract bond is a surety bond that guarantees an obligation connected to a construction, supply, or service contract. The contractor or supplier is the principal, the project owner or other party requiring the bond is the obligee, and the surety backs the principal’s bonded obligation up to the bond’s terms and limit.

Different bonds apply at different stages of a project. A bid bond supports the bidding process; performance and payment bonds address completion and payment obligations after award; supply and maintenance bonds address specific contract duties. Environmental work may require one of these bonds with additional underwriting for the project’s environmental risks. Eligible small businesses may also obtain qualifying bonds through the SBA Surety Bond Guarantee Program.

Each bond type has its own requirements, underwriting factors, and application. Select the bond that matches your situation below for details and to apply.

If you already know the bond named in your bid specifications or contract, select it below. If you are not sure, use this quick guide:

• Submitting a bid that requires a bid guarantee → Bid Bond
• Awarded a contract and required to guarantee completion and payment of subcontractors, laborers, or suppliers → Payment & Performance Bonds
• Supplying materials or equipment under an awarded contract → Supply Bond
• Required to guarantee workmanship or materials for a stated period after completion → Maintenance Bond
• Performing environmental remediation, asbestos abatement, hazardous-waste, or similar work → Environmental Bond underwriting for the required underlying bond
• A small business that needs SBA-supported bonding because standard bonding is not available on reasonable terms → SBA Bond

The bid documents, contract, bond form, statute, or other obligee requirement control the exact bond form and amount. If the requirement is unclear, send us the bond form or contract language and we will help identify the appropriate application.

These bonds are underwritten individually. Depending on the bond type and project, the surety may evaluate:

• The bond form, bond amount, and contract terms
• Scope of work, project size, and job location
• The applicant’s experience with similar work
• Current work in progress and available capacity
• Business and personal credit history
• Business and personal financial strength, including net worth, liquidity, and available assets
• Prior bond or claim history, when applicable

Additional information may be required for complex projects, environmental work, or SBA-guaranteed bonds.

Contract bonds are individually underwritten. Cost depends on the bond type and amount, the contract and scope of work, the applicant’s experience and financial profile, and the surety program used. Some qualifying accounts may receive rates starting below 1% of the contract amount, while other accounts or higher-risk projects may see higher rates.

A bid bond may be provided at no separate charge when the same surety expects to issue the required performance and payment bonds. Contact us for a quote based on the bond form and project details.

Each bond type has its own application and underwriting requirements. Select your specific bond type below, then use that bond’s Quick Apply link to get started. Qualifying bids and contracts under $250,000 may use our Fast Track application, while contracts of any size or scope may use our Bond Kit. Once we receive your application and supporting documents, our underwriting team will review your project and financial information and work with you to finalize your bond and next steps.

Guarantees that a bidder will honor its bid and, if awarded the contract, execute the contract and furnish any required performance and payment bonds within the specified time. It protects the obligee from covered loss if the successful bidder fails to meet those obligations.

A category of contract bonding for work involving environmental or hazardous-material risks, such as remediation or abatement. The underlying obligation may be a bid, performance, payment, supply, or maintenance bond, with the environmental scope considered during underwriting.

Guarantees the contractor’s obligation to correct covered defects in workmanship or materials during the maintenance period stated in the bond or contract. It is also commonly called a warranty bond; the required term is set by the obligee.

Two bonds commonly required together after contract award. The performance bond guarantees completion in accordance with the bonded contract; the payment bond protects eligible subcontractors, laborers, and suppliers if the contractor does not pay as required.

For eligible small businesses seeking bonding through the U.S. Small Business Administration’s Surety Bond Guarantee Program. The bond itself is issued by a participating surety, while the SBA guarantees a portion of the surety’s loss on qualifying bid, performance, payment, and ancillary bonds.

Guarantees that a supplier will furnish the materials, goods, or equipment required by the bonded contract in accordance with its terms. The bond protects the obligee from covered loss if the supplier fails to perform the bonded supply obligation.

Contact American Surety Bonds Agency toll-free at (877) 201-8976 or our Atlanta office at (404) 486-2355. Our team can help identify the bond requirement, select the appropriate application, and explain the underwriting process.