Best Surety Bonds for Contractors (2026)

Spot lists a provider only when its published Surety Bonds information includes a documented claim (verified or company-reported) about eligibility, role, coverage or application that mentions contractors. “Named for Contractors” marks a provider’s own statement of who it serves; “Related mention” marks a role, coverage or application claim.

Providers with both a Reliability Score and a Review Score rank first, then providers with one of the two, then providers with neither. Within each group the order is the equal-weight average of the scores the provider has, as in the industry guides; ties break on fit, then the number of documented claims, then name.

The Reliability Score comes from Spot’s reliability assessments and the Review Score from the provider’s rated review sources. Neither measures whether a policy fits your business or what it costs. How Reliability Scores work.

Spot, a product of Tools for Enlightenment, publishes this research and works in the commercial insurance market. Editorial policy.

A license can require a bond. Washington's labor department says a construction contractor must file a continuous surety bond of $30,000 for general contractors or $15,000 for specialty contractors, or an assigned bank account, and that a lapsed bond suspends registration. California's licensing board says a $25,000 contractor's bond must be in place before it issues, reactivates or renews an active license, and that it is filed for the benefit of consumers harmed by defective construction or license violations and for unpaid employees.^1,2

Public jobs set their own bond thresholds. Federal rules require performance and payment bonds for construction contracts above $150,000, due before you receive a notice to proceed, with each normally written for 100 percent of the contract price. For federal contracts from $35,000 to $150,000, the contracting officer selects two or more payment protections, and a payment bond is one option. States have their own thresholds: Washington requires a bond on public works but lets contractors on contracts of $150,000 or less opt for 10 percent retainage, and California requires a payment bond on public works contracts over $25,000, with a separate rule for state entities.^3,4,6,8

A bid can need a bond too. On federal construction work a contracting officer cannot require a bid guarantee unless a performance bond or a performance and payment bond is also required, and the agency chief may waive a bid guarantee. The National Association of Surety Bond Producers (NASBP) says a bid bond mainly lets the owner recover the cost of re-bidding if the winner fails to sign or provide the required bonds, and does not guarantee any portion of the construction.^5,10

You repay the surety. NASBP says a surety bond is a three-party arrangement designed to prevent a loss, in which the surety is secondarily liable if you default, and that the surety has a signed general agreement of indemnity obligating the named indemnitors to protect it from any loss. It says the surety almost always requires the principal, the individuals who own or control the company, their spouses and often affiliated companies to sign before it issues bonds. NASBP says a contract bond protects the owner, and indirectly certain subcontractors and suppliers; it does not protect you.^10,11

Your financials set what you can bid. NASBP says a surety views its underwriting as a form of credit and that obtaining bonds is more like obtaining bank credit than purchasing insurance. For federal bonds, Treasury's Circular 570 lists acceptable sureties with underwriting limitations; a surety may write a bond above its limit only if it protects the excess by reinsurance, coinsurance or other methods.^10,11,12

Unpaid subs and suppliers come after the payment bond. On a federal job, a first-tier claimant unpaid 90 days after its last work may sue on the payment bond, within one year; a second-tier claimant must give the prime contractor written notice within 90 days. In Washington, claimants must file written notice within 30 days after completion and acceptance. NASBP says claimants cannot place mechanics' liens against public property, so the payment bond may be their only protection. Because you indemnify the surety, a claim on your bond becomes your debt.^7,9,10

Start from the solicitation or license rule, not the surety. Get the required bond type, the penal amount and the bond form from the owner or licensing board before you ask for a quote, and confirm the dates: federal bonds are due before the notice to proceed, and a license bond must be in place before a license issues or renews.^2,3

Prepare the file a surety will review. NASBP lists the past three fiscal year-end financial statements, a current interim statement with aged receivables and payables, bank loan agreements, personal financial statements of closely held company owners and a current work-in-progress report. Have them ready before the owner's deadline.¹¹

Read the indemnity agreement before you sign, ideally with your own counsel. Ask who signs, whether spouses and affiliated companies are included, and what the surety can recover. NASBP also says the bond premium is typically paid by the project owner in the first pay request on a contract bond; ask whether your price carries it.^10,11

Check the surety and ask about the SBA guarantee if you are declined. For a federal bond, check the surety against Circular 570, which also says a surety must be licensed in the state in which it provides a bond; California requires its contractor's bond to come from a surety licensed through the state insurance department. The SBA says it guarantees bid, performance and payment bonds for small businesses that might not meet other sureties' criteria, on contracts up to $9 million for non-federal and $14 million for federal work, with a 0.6% fee on performance and payment bond guarantees, but it does not guarantee commercial bonds.^2,12,13