The bond that gets you on the job and keeps you there.
A performance bond guarantees the owner that your work will be completed on the terms you signed. BF Bond has placed contract surety since 1949, from a first $50,000 municipal job to established contractors carrying multi-million dollar programs.
- Contract surety since 1949
- Independent, multiple carriers
- A-rated carrier partners
What is a performance bond?
A performance bond is a contract surety bond that guarantees you will complete a construction project according to the plans, specifications, schedule, and price in your contract. If you default and the owner properly terminates the contract, the surety steps in: it can finance you through the problem, arrange a completion contractor, or pay the owner the cost of completion up to the bond penalty.
Three parties sign on. You are the principal. The project owner is the obligee protected by the bond. The surety is the carrier extending the guarantee. Unlike insurance, a performance bond is an extension of credit to your company. The surety expects to be reimbursed for any loss, which is why underwriting looks hard at your financial statements, your work-in-progress schedule, and your track record before it issues.
Performance bonds almost always travel with a payment bond, which protects your subcontractors and suppliers instead of the owner. On federal work above the Miller Act threshold both are mandatory, and most states have their own Little Miller Act imposing the same requirement on public projects.
- Guarantees completion of the contract you signed
- Usually written at 100 percent of the contract price
- Required on nearly all public work, common on private work
- Underwritten on your financials, experience, and capacity
Performance bonds at a glance
Typically 100 percent of the contract price, occasionally 50 percent on some private jobs
Usually 1 to 3 percent of the contract price, on a sliding scale that drops as the job gets larger
Runs through completion and acceptance, plus any warranty or maintenance period
Federal and state agencies, municipalities, school districts, private owners, and general contractors bonding their subs
A payment bond, and often a bid bond during the tender stage
When will you be asked for one?
If public money or a cautious private owner is involved, a performance bond is usually part of the deal.
Federal Projects
The Miller Act requires performance and payment bonds on federal construction contracts above the statutory threshold, with no exceptions for prime contractors.
State & Municipal Work
Little Miller Act statutes extend the same requirement to state, county, city, school district, and transit authority projects nationwide.
Private Owners & Lenders
Developers and construction lenders increasingly require bonding to protect the project budget and satisfy financing conditions.
Subcontractor Bonds
General contractors routinely require performance bonds from their trade subcontractors to shift completion risk down the chain.
How we get you bonded
Apply online
Start with our guided application, about five minutes. Save your progress and finish later if you need to gather figures.
Build your submission
We assemble the underwriting package: financials, work in progress, resumes, and bank and supplier references.
Place with a carrier
We shop your account across our carriers, including small and emerging contractor programs, and negotiate rate and capacity.
Bond issued
Executed bonds go out on the owner form with the required seals and powers of attorney, in time for your award deadline.
Performance bond FAQs
Bid deadline coming up?
Start the application now and a BF Bond contract agent will work your submission alongside you. Call if the clock is tight.
