Contractor Bonds
Get bonded to bid on bigger projects and build customer confidence. Call (800) 918-3584 for fast approval.
Surety bonds are essential for many contractors, enabling you to bid on public projects, meet licensing requirements, and demonstrate financial stability to clients. We make the bonding process simple and fast.
Understanding Surety Bonds
A surety bond is a three-party agreement:
- Principal: You (the contractor)
- Obligee: The project owner or government entity
- Surety: The bonding company guaranteeing your obligations
If you fail to meet your obligations, the surety pays the obligee, but you must reimburse the surety.
Learn more about protecting your contracting business at our Arizona contractor insurance page and explore our comprehensive contractor insurance services.
Types of Contractor Bonds
License and Permit Bonds
License Bonds
- Required by many states for contractor licensing
- Guarantee compliance with local laws and building codes
- Protect consumers from contractor violations
- Annual renewal typically required
Permit Bonds
- Required for specific construction permits
- Guarantee work completion per permit requirements
- Protect municipalities from code violations
- Project-specific duration
Contract Bonds (Construction Bonds)
Bid Bonds
- Required to bid on public projects
- Guarantee you'll enter contract if awarded
- Often free or minimal cost
- Shows financial capability
Performance Bonds
- Guarantee project completion per contract
- Required for most public projects
- Protects owner from contractor default
- Typically 100% of contract value
Payment Bonds
- Guarantee payment to subs and suppliers
- Prevents liens on public property
- Required with performance bonds
- Protects lower-tier contractors
Maintenance Bonds
- Guarantee work quality after completion
- Cover warranty period obligations
- Typically 1-2 year terms
- Often required for public projects
Other Bond Types
Supply Bonds
- For material suppliers on projects
- Guarantee timely delivery
- Protect against price increases
- Project-specific terms
Subdivision Bonds
- For residential developers
- Guarantee infrastructure completion
- Required by municipalities
- Cover roads, utilities, etc.
Benefits of Being Bonded
Business Growth
- Bid on Public Projects: Required for government work
- Larger Projects: Many private projects require bonds
- Competitive Advantage: Stand out from unbonded competitors
- Financial Credibility: Shows stability and reliability
Client Confidence
- Trust Building: Third-party guarantee of performance
- Risk Reduction: Clients protected from contractor default
- Professional Image: Demonstrates serious business approach
- Quality Assurance: Incentive to complete work properly
Bond Approval Factors
Surety companies evaluate:
- Credit Score: Personal and business credit
- Financial Statements: Cash flow and assets
- Experience: Years in business and past projects
- Work in Progress: Current project load
- References: Suppliers, subs, and clients
Cost Considerations
Bond premiums typically range from 0.5% to 3% of the bond amount, depending on:
- Bond type and amount
- Credit score and financials
- Industry experience
- Project complexity
- Claims history
Fast-Track Bonding Program
For smaller bonds (under $250,000), we offer:
- Same-day approval
- Minimal documentation
- Competitive rates
- Online applications
- Direct underwriter access
Get Bonded Today
Whether you need a simple license bond or complex contract bonds for a major project, Contractor's Choice Agency makes bonding simple.
Call Now: (800) 918-3584 or 844-WORK-247
Our bond specialists understand contractor needs and will guide you through the entire bonding process.
Key Features
- License and permit bonds
- Bid bonds (often free)
- Performance and payment bonds
- Maintenance bonds
- Supply bonds
- Fast approval process
Frequently Asked Questions
What does it mean to be bonded?
Being bonded means you have a surety bond - a three-party agreement where a surety company guarantees your obligations to a project owner or government entity.
Do I need to be bonded?
Many states require license bonds for contractors. Public construction projects typically require contract bonds. Being bonded also builds trust with private clients.
What's the difference between bonds and insurance?
Insurance protects you from losses. Bonds protect your clients and guarantee you'll fulfill your obligations. If a claim is paid on a bond, you must reimburse the surety company.