Bond guide
What determines performance bond cost
Bond premium is a percentage of the contract amount, but the percentage depends on your account.
Factors
- Owners' personal credit
- Company financial strength and working capital
- Experience with similar jobs
- Job size, duration, and complexity
- Bond form and contract terms
- Warranty or maintenance periods
Sliding scales
Many sureties use tiered rates so that the rate on each additional block of contract value is lower. Ask how the rate applies to your contract amount and how change orders are billed.
Lowering your cost
Improve credit, strengthen financial statements, build a track record, and work with a surety that writes your type of work regularly.
Frequently asked questions
Why don't you publish a rate?
Sureties price each account individually based on underwriting. A generic rate would not reflect your credit, finances, or the job.
Does the bond premium change if the contract changes?
Change orders that increase the contract price usually increase the premium.
Is the premium refundable?
Typically the premium is earned once the bond is issued, though terms vary.
More bond guides
- Performance bonds for contractors
- Payment bonds
- Bid bonds
- Maintenance bonds
- Supply bonds
- Contractor license and permit bonds
- How to get bonded as a contractor
- Bonding capacity explained
- What determines performance bond cost
- Public works bond laws: the Miller Act and state statutes
- Surety prequalification checklist for contractors
Last updated October 15, 2026 · How we research