Winning the bid is a promise. A bid bond makes it binding.
The bond that backs your number
Public agencies and serious private owners rarely take a bid at face value. A bid bond is the surety’s guarantee that if your bid is accepted, you will actually enter the contract at that price and post the performance and payment bonds the job requires. If you win and walk away, the owner can claim the difference between your bid and the next acceptable one — up to the bond’s penal sum.
What a bid bond guarantees
A bid bond protects the project owner during procurement. It guarantees two things: that you will honor your bid and sign the contract at the price you submitted, and that you will furnish the performance and payment bonds before work begins. If the low bidder backs out, the owner is made whole for the cost of moving to the next bidder, capped at the bond amount (commonly 5%–10% of the bid).
Why a bid bond is really a pre-qualification
Here is what most contractors miss: sureties typically issue bid bonds at no premium. The bid bond is not where the surety makes its money — it is where the surety puts its name on the line that it will back your final performance and payment bonds if you win. In other words, a bid bond is a signal of bondability. Getting one still requires full underwriting of your financials, experience, and credit.
How much a bid bond costs and covers
The bond amount is a percentage of your bid — 5% to 10% is standard, with 10% common on public work. Because there is usually no premium, your cost is the underwriting relationship, not a fee. Alternatives an owner may accept include a certified or cashier’s check, but those tie up cash a bid bond does not. We establish your bonding capacity first, so a bid bond is ready when the right project comes up.
Frequently Asked Questions
How much does a bid bond cost?
Sureties normally issue bid bonds at no premium — the bond itself is free. What it requires is underwriting: the surety is effectively pre-approving you for the performance and payment bonds you’ll need if you win, so it reviews your financials, experience, and credit first.
What happens if I win the bid but don’t sign the contract?
The owner can make a claim on the bid bond and recover the difference between your bid and the next acceptable bid, up to the bond’s penal sum (typically 5%–10% of your bid). You would then be obligated to reimburse the surety.
Does a bid bond guarantee the work?
No. A bid bond only guarantees that you’ll enter the contract and post the final bonds. The work itself is guaranteed by the performance bond, and payment to your subs and suppliers by the payment bond.
Do I need a bid bond for private projects?
Not always. Bid bonds are standard on public competitive bids and common on larger private jobs, but private owners set their own rules. We’ll tell you what a given project requires.
How do I get a bid bond through Cory Washington & Co.?
Request a quote or contact our team. We confirm your exact requirement, market your bond across multiple surety companies that compete for it, and handle the filing. Cory Washington & Co. LLC is licensed in all 50 states.
All surety bond descriptions on this website are provided by Cory Washington & Co. LLC strictly for general informational purposes. They are not intended to be, and should not be relied upon as, legal, financial, or bonding advice. Surety bonds are not insurance. Bond requirements — including amounts, obligees, and bond forms — are set by government authorities and other obligees and change over time; the information presented is general in nature and does not guarantee the availability, terms, conditions, or amount of any bond. Actual bond terms are governed by the bond form issued by the surety and the requirements of the obligee, and any bond remains subject to underwriting approval. Nothing on this website creates or implies an agent-client relationship, binds a surety, or issues a bond. Cory Washington & Co. LLC expressly disclaims any liability for actions taken, or not taken, based on the content provided here. For advice regarding your particular situation, please confirm current requirements with the relevant authority and consult directly with a licensed professional at Cory Washington & Co. LLC.