Bid Bond vs Performance Bond: What's the Difference?
December 10, 20245 min readBy Can Do Surety Bonds
If you're a contractor bidding on construction projects, you'll encounter different types of contract bonds. Two of the most common are bid bonds and performance bonds.
Need help confirming the right bond? Share the bond type, amount or obligee if known, deadline, and contact details. We'll confirm the exact requirement and follow up after review; timing varies by bond type and application.
Request a quoteA bid bond guarantees that if you win a project, you'll enter into the contract at your bid price and provide the required performance and payment bonds. It's typically 5-10% of the bid amount and usually free or low cost.
A performance bond guarantees that you'll complete the project according to contract specifications. It's typically 100% of the contract value and costs 1-3% of the bond amount for contractors with good credit.
Performance bonds often come paired with payment bonds, which guarantee you'll pay subcontractors, material suppliers, and laborers.
To bid on projects requiring bonds, you need bonding capacity. Sureties evaluate your credit history, financial statements, work experience, and current work backlog.
Can Do Surety Bonds helps contractors get bid bonds, performance bonds, and payment bonds. Same-day issuance may be available after requirements, eligibility, and underwriting are confirmed. Call (609) 491-7404 for a free quote.