A surety bond that protects the project owner if a contractor fails to perform or pay subcontractors and suppliers.
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In the Field
Public projects above a threshold (federal: $150K) legally require bonding. Private owners can require it too. Bonding capacity signals contractor financial health — surety companies vet contractors thoroughly before issuing bonds.
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Rule of Thumb
Bond premiums typically run 0.5–3% of contract value depending on contractor track record and project risk.