Bid Bond vs Performance Bond: What's the Difference?

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.

A 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 (often same-day), performance bonds, and payment bonds. Call (609) 491-7404 for a free quote.