Bid Bonds
A bid bond supports the contractor’s bid and commitment to enter the contract and provide the required final bonds if awarded the project.
Bonding support for Virginia contractors
Contractor Surety Bonds
From a single license bond to bid, performance, and payment bonds for larger construction projects, Ford Agency can help contractors pursue the bond required for the opportunity in front of them.
Send us the bond requirement, bid specifications, contract, or required bond form. We will review it and help identify the appropriate next step.
Surety is different from insurance
A bond guarantees an obligation to another party.
A contractor surety bond generally involves three parties. The contractor is the principal, the project owner, government agency, municipality, or other party requiring the bond is the obligee, and the company issuing the bond is the surety.
Unlike conventional insurance, a surety bond primarily protects the obligee. If the surety pays a valid claim, the contractor and other indemnitors may be required to reimburse the surety for the loss and related expenses.
This distinction affects both underwriting and claims. A surety evaluates whether the contractor has the experience, resources, financial strength, and capacity to complete the bonded obligation.
Helpful starting point:
Send us the exact bond form, bid specifications, contract section, or
written requirement whenever one is available.
Contract bond fundamentals
Bid, performance, and payment bonds serve different purposes.
Construction contracts may require one bond or a coordinated package of bonds. The project documents determine exactly what is needed.
Performance Bonds
A performance bond guarantees the contractor’s performance of the bonded contract according to its terms and conditions.
Payment Bonds
A payment bond guarantees payment of covered subcontractors, laborers, and material suppliers connected with the bonded project.
Additional contractor bonds
Bond requirements extend beyond public construction contracts.
Contractors may encounter bonding requirements when applying for a license, obtaining a permit, completing improvements, or satisfying a private contract.
Maintenance Bonds
May guarantee correction of covered defects or maintenance of completed work for a specified period after project completion.
License & Permit Bonds
May be required by a state agency, municipality, locality, or other authority as part of a contractor’s licensing or permitting obligations.
Subdivision Bonds
May guarantee completion of roads, drainage, utilities, or other improvements required in connection with a development.
Site-Improvement Bonds
May guarantee completion of specified public or private site work required by a municipality, owner, or development agreement.
Bond underwriting
What a surety commonly evaluates
Bond underwriting depends on the type and size of the obligation. Smaller transactional bonds may require a relatively simple application. Larger contract bonds typically require a more complete review of the contractor and project.
The goal is to understand the contractor’s ability to perform the work, manage the project, meet financial obligations, and complete the bonded contract.
- Experience with similar work
- Project size and complexity
- Current work on hand
- Financial strength and working capital
- Company and owner credit history
- Prior bonded-project performance
- Project owner, location, and contract terms
- Availability of labor, equipment, and subcontractors
Do not wait until the final hours before a bid is due. A surety may need time to review the contractor, project, contract, bond forms, and current workload.
If you expect to pursue bonded work regularly, establishing a contractor bonding program can make future requests more efficient. Updated financial and work-on-hand information can help the surety evaluate both individual projects and overall bonding capacity.
An occasional one-time bond is also welcome. We can review the opportunity and help determine what the available markets may require.
Start a contractor bond requestWhat to send us
Start with the requirement and project details.
- The required bond form
- Bid invitation or contract documents
- Bond amount
- Project description and location
- Project owner or obligee
- Bid date or required delivery date
- Contract amount and expected duration
- Your company and ownership information
Building bonding capacity
A contractor bonding program can grow with the business.
Contractors pursuing larger or more frequent bonded work benefit from organized records and regular communication with their surety professional.
Maintain current financial information
Accurate internal statements, year-end financials, bank information, and accounts-receivable and payable schedules help demonstrate the company’s current financial position.
Track work on hand
A clear work-on-hand schedule helps show current backlog, anticipated gross profit, completion progress, and remaining contract costs.
Choose projects carefully
Project type, size, geography, contract terms, owner, labor needs, and completion schedule can all affect the risk of a bonded job.
Communicate early
Discuss larger opportunities, ownership changes, financial changes, or project problems before they become urgent bonding issues.
Bonds and insurance work together
A bond does not replace your contractor insurance program.
A project may require both surety bonds and specific insurance coverages. Ford Agency can help coordinate the two sides of the requirement.
Frequently asked questions
Contractor surety bonds
Bond requirements and underwriting vary. The required bond form and project documents are the best starting point.
A contractor surety bond is a three-party agreement among the contractor, the obligee requiring the bond, and the surety issuing it. The bond guarantees a specific contractual, licensing, or regulatory obligation.
A bid bond supports the contractor’s bid and commitment to enter the contract. A performance bond guarantees completion according to the contract. A payment bond guarantees payment of covered subcontractors, laborers, and suppliers.
Generally, no. The bond primarily protects the obligee requiring it. If the surety pays a valid claim, the contractor and other indemnitors may be required to reimburse the surety.
Pricing depends on the bond type, amount, duration, contractor, project, credit, financial strength, and underwriting. We need the actual requirement before estimating the cost accurately.
A smaller bond may require a short application and credit review. Larger contract bonds may require business and personal financial information, work-on-hand schedules, project history, bank information, and details about the proposed project.
Yes. Ford Agency can help pursue an occasional project-specific bond or work with a contractor seeking an ongoing bonding program for repeated bid, performance, and payment bond needs.
Start with the bond requirement
Have a bond form, bid specification, or upcoming project?
Send us the requirement and project details. We will review the bond need and help you pursue the appropriate surety solution.