A construction bond is a promise that a building project will be done right and that the workers and suppliers get paid. It is standard on public and many large private jobs.
- Who needs it
- Contractors on public and large private jobs
- Bonds included
- Bid, performance, and payment bonds
- What you pay
- About 1% to 3% of the contract
- Term
- Length of the project
- A claim protects
- Owners, subs, and suppliers
What is a Construction Bond?
Construction bond is an umbrella term. It covers the main contract bonds used on building projects: bid bonds, performance bonds, and payment bonds. Together they protect the owner and everyone who works on the job.
The bid bond keeps bidding honest. The performance bond guarantees the work gets finished. The payment bond makes sure subs and suppliers get paid.
Who needs a Construction Bond?
Contractors who build or repair things for governments and large owners usually need them. Public projects almost always require them.
Owners ask for these bonds so they are protected from unfinished work, liens, and unpaid bills.
How does a Construction Bond work?
On a typical project, it works like this:
- You provide a bid bond when you bid on the job.
- If you win, you sign the contract.
- You provide a performance bond and a payment bond from Junno Surety.
- You build the project and pay your team along the way.
- If you fail to finish or pay, the owner or a sub can file a claim.
Bid jobs you can handle, and these bonds simply prove you are ready.
How much does a Construction Bond cost?
Performance and payment bonds together usually cost 1% to 3% of the contract. Bid bonds are often free or very low cost.
Junno Surety prices at the industry rate minus 5%. Your credit, finances, and experience set your exact rate.
What happens if someone files a claim?
A claim happens when work is not finished, or a sub or supplier is not paid. The bond company investigates, pays a valid claim, and then you pay the bond company back.
How to get your Construction Bond from Junno Surety
Junno Surety helps contractors line up the full set of construction bonds. Share your project and basic financials, and we will quote you fast so you can bid and build on time.
We are a licensed surety bond agency and can often issue your construction bond the same day. Start your free quote → or call (762) 499-0237.
Things to know about a Construction Bond
Construction bond is a catch-all name for the three bonds used on building jobs. The bid bond comes first, when you bid the work. The performance bond comes next, promising you will finish. The payment bond rides along, promising your subs and suppliers get paid. On public jobs, you usually need all three. The smart move is to set up your bonding relationship before you bid. That way you can move fast and bid with confidence. Keep your finances clean and your records current, because the bond company will look at them. A strong bonding history lets you take on bigger jobs and win more work over time.
Frequently asked questions
What bonds are included?
The main ones are the bid bond, the performance bond, and the payment bond. Many projects use all three.
How much do they cost?
Performance and payment bonds together usually run 1% to 3% of the contract. Bid bonds are often free or very cheap.
What do you need to quote me?
Your contract details and some basic financial information. Bigger jobs may need a bit more paperwork.
Do I need all three construction bonds?
On most public jobs, yes. You provide a bid bond to bid, then performance and payment bonds once you win the contract.
What helps me get approved?
Clean financials, a good credit history, and a record of finished jobs. The stronger your file, the higher your bonding limit.