A bid bond guarantees you will stand behind your bid and furnish the contract bonds if you win. We set up your bonding program so individual bids issue fast, often at no separate premium.
Premium is a percentage of the bond amount, set by underwriting. The figures above are statutory amounts, not what you pay.
What a bid bond does
On most public works and many private projects, the owner requires a bid bond with your proposal. It protects the owner if the winning bidder walks away or cannot furnish the required performance and payment bonds. The bond assures the owner that your bid is serious and that you are bondable for the job.
What it costs
Bid bonds are typically issued at no separate charge, as part of your surety program. The real question a surety answers is whether it would bond the finished contract if you win. That capacity is built up front, which is why working with a broker on your overall program is the key to fast, free bid bonds.
Getting one before a deadline
Once your program is in place, a specific bid bond can be turned around quickly. To move fast we will want:
The obligee, project name, and bid date
The estimated contract amount and bid bond percentage required
A current snapshot of your business and work on hand
Bad credit or a prior claim? We place it.
Declined by an instant-issue site does not mean declined everywhere. We shop hard-to-place markets and work with credit challenges. Underwriting still applies.
Reviewed by Michael Melshenker, CEO. Figures verified against CSLB and CA DOI sources.
What is a bid bond?
A bid bond guarantees two things to a project owner: that you will honor your bid if you win, and that you will furnish the required performance and payment bonds to take the contract. It is written for a percentage of the bid: typically 5 to 10% of the bid.
How much does a bid bond cost?
Most bid bonds carry no separate premium. They are issued against an existing surety program, on the strength of whether the surety would bond the finished contract if you win. The cost sits in the performance and payment bonds that follow award, not in the bid bond.
Who requires a bid bond?
Public agencies require one on virtually every advertised project, and many private owners require them on larger work. The invitation to bid names the percentage required and the form to use, and a proposal submitted without one is normally rejected as non-responsive.
How fast can a bid bond be issued?
With a surety program already in place, an individual bid bond often issues the same day. The slow part is the first one: establishing the program requires a financial review. Set the program up before the bid you actually care about, not the week it is due.
Can I get a bid bond with bad credit?
Contract surety weighs the business, not only the owner's credit score. Working capital, the work-on-hand schedule, and CPA-prepared statements carry more weight. Impaired credit narrows the carrier list and can route the file to the SBA guarantee program, but it rarely ends the conversation.
Can I buy a bid bond online, or do I need a broker?
Bid bonds are not an instant-issue product. They are drawn against an underwritten bonding line, which a broker builds and maintains across carriers. An online form cannot establish capacity, and capacity is what decides the size of project you are allowed to bid at all.
What does the surety need to issue a bid bond?
For the bond itself: the obligee, project name, bid date, estimated contract amount, and the required bid bond percentage. For the program behind it: business financial statements, a work-in-progress schedule, the contractor questionnaire, and personal financial statements from the owners.
What happens if my bid bond request is declined?
A decline usually means the project exceeds current capacity, not that the contractor is unbondable. The remedies are a smaller pursuit, strengthened working capital, or the SBA Surety Bond Guarantee program, which lets a surety write files it would otherwise pass on.
Does a bid bond expire?
It runs for the bid acceptance period named in the solicitation and then falls away. It is never renewed. If award is delayed beyond that window, the obligee asks for an extension, and the surety has to agree to it in writing for the bond to remain good.
What does a bid bond pay, and to whom?
It pays the project owner, never the bidder. If you win and then refuse the contract or cannot furnish the contract bonds, the owner recovers the cost of going to the next bidder, up to the bond's penal sum. You then reimburse the surety for what it paid.
How does an obligee verify a bid bond is genuine?
By confirming the surety is admitted in California through the Department of Insurance, or listed as an approved federal surety for federal work, and that the attorney-in-fact who signed holds a current power of attorney attached to the bond. Obligees check both, so contractors should too.
What is the difference between a bid bond and a performance bond?
A bid bond guarantees your bid and your ability to furnish contract bonds, and it ends when award does. A performance bond replaces it after award and guarantees the work is actually completed. They are two stages of one program, not alternatives to each other.
Ready for your bid bond?
Get the right bond fast, with a real underwriter on your side.
