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Kentucky Commonwealth Construction Bonds

For Commonwealth construction contracts over $100,000, Kentucky requires a 100% performance bond covering the increased contract price and a separate 100% payment bond based on the original price. At or below $100,000, the agency administrator must document whether to require a performance bond; the procurement document must state that requirement.

What Is Surety Bonds?

A surety bond guarantees that your business meets a specific obligation to a customer, contracting party or government agency. If a contract, license or permit requires one, get its exact form and amount; a bond is not insurance for your own losses. Read the national Surety bonds guide.

Kentucky Surety Bonds Requirements

Requirement	Details
Construction over $100,000	KRS 45A.190 requires performance and payment bonds to the Commonwealth for construction contracts over $100,000; performance security is 100% of contract price as increased and payment security is 100% of the original price. ¹
At or below $100,000	For construction service contracts at or below $100,000, the contract administrator must assess and record whether to recommend performance security; if required, the solicitation must say so. ¹
Release follows written performance review	Before release of a performance bond, the agency contract administrator reviews interim audits and completes a written final review; the using-agency head then makes a written recommendation whether to release or claim on the bond. ^1,²

What Should You Watch for With Surety Bonds in Kentucky?

This procurement code is for the Commonwealth
KRS Chapter 45A and 200 KAR 5:305 concern Commonwealth purchasing agencies. Do not extend this state procurement threshold to county, municipal, or private jobs without checking their separate rules and contract. ^1,²
Non-construction performance bonds are discretionary
For larger commodity, supply, equipment, or service contracts, the administrator evaluates whether performance security should be required and records the reason. The amount and requirement must appear in the procurement document. ¹
Bond form may be procurement-specific
Kentucky’s regulation incorporates standard forms through the Finance and Administration Cabinet manual but allows written modifications for a particular procurement when reasonably required in the Commonwealth’s interest. ²

Which Surety Bonds Providers Have Documented Kentucky Licenses?

These providers publish a national listing for Surety bonds; the state records document licenses for the entities and roles shown below. Some records rely on company-reported information rather than independent regulator verification. A national listing does not confirm the product is available in Kentucky. Check the regulator’s license lookup and confirm state availability for your business when requesting a quote.

TechInsurance
Specialty Program Group LLC
Insurance producer · checked 2026-09-28
TechInsurance’s current licensing page names Specialty Program Group LLC / SPG Insurance Solutions and lists state license numbers, but labels Rhode Island “Individual licenses” rather than identifying a license for the named agency. RI is omitted because this disclosure does not establish agency authority there; this is a search limitation, not an assertion that the company is unlicensed. The remaining state entries are company-reported and are not an insurance product availability map. ¹⁶
TechInsurance arranges surety bonds for small businesses.

Who Regulates Insurance in Kentucky?

Kentucky Department of Insurance

The Kentucky Department of Insurance licenses agents and insurers, monitors the insurance market, and accepts complaints about insurance companies and agents. You can use its state lookup or complaint service to check a license or raise an insurance issue. ^3,^4,⁵

Website: Regulator website
License lookup: Search licensed producers
Complaints: File a complaint
Phone: 800-595-6053 (option 1, Kentucky only)

Surplus-Lines Tax and Stamping Office in Kentucky

Reported tax rate. 3% on Kentucky-home-state premiums and other premium consideration; separate 1.8% surcharge on eligible risks located in Kentucky, subject to statutory exceptions; applicable local-government premium tax may also apply ^6,^9,^7,^8,¹⁰

When Kentucky is the insured's home state, the state tax is 3% of premium and other consideration treated as premium; local-government premium taxes may also apply. A separate 1.8% surcharge generally applies to Kentucky risks, but state law exempts multistate nonadmitted risks and specified government and nonprofit premiums. The broker must make a diligent effort to place coverage with an admitted carrier before using surplus lines.

What Should You Ask Before Buying Surety Bonds in Kentucky?

Which solicitation, statute, and project category does the obligee say governs this contract?
What bond form, penal sum, obligee name, effective date, and filing deadline must the surety meet?
What indemnity, collateral, or personal guarantee would the surety require from the principal, and how could a claim affect the business?

Surety Bonds in Kentucky: Frequently Asked Questions

Must the surety be authorized in Kentucky?

For statutory construction performance and payment bonds, the law requires a surety company authorized to do business in Kentucky or another form of security satisfactory to the Commonwealth. ¹

When should the contractor expect release?

The administrator’s performance audits occur at one-third and two-thirds completion, and at least annually for contracts lasting over a year. Bond release follows a documented final compliance review and the purchasing agency’s decision. ¹

Sources for Surety Bonds in Kentucky

KRS 45A.190, Performance bond and payment bond. Kentucky General Assembly, Legislative Research Commission; Subsections (2)–(4); amended by 2024 Ky. Acts ch.223 §79, effective April 27, 2024. Accessed 2026-09-28.
200 KAR 5:305, Performance bonds; forms; payments. Kentucky Legislative Research Commission; Sections 1–3; regulation effective February 10, 2020, reviewed as current September 28, 2026. Accessed 2026-09-28.
Kentucky Department of Insurance. Kentucky Department of Insurance; Homepage and consumer telephone. Accessed 2026-09-28.
Insurance License Lookup. Kentucky Department of Insurance; State-designated producer/company search. Accessed 2026-09-28.
File an Insurance Complaint. Kentucky Department of Insurance; Official DOI consumer complaint page accepts complaints involving general liability and disputes with insurers, agents or adjusters. Accessed 2026-09-28.
KRS 304.10-180. Kentucky General Assembly; KRS 304.10-180(1): Kentucky-home-state; 3% applies to premiums, assessments, fees, charges or other premium consideration; local premium tax is separate. Accessed 2026-09-28.
Local Government Premium Taxes. Kentucky Department of Insurance; Current local tax schedules. Accessed 2026-09-28.
KRS 304.10-090. Kentucky General Assembly; KRS 304.10-090 requires policy notice that nonadmitted insurer is not a Kentucky Insurance Guaranty Association member and its benefits are unavailable upon insolvency. Accessed 2026-09-28.
KRS 136.392. Kentucky General Assembly; KRS 136.392(1),(5)-(6): $1.80 per $100 on premium/other charges for Kentucky risks; named government/nonprofit exceptions; multistate nonadmitted risks exempt. Accessed 2026-09-28.
Surplus Lines. Kentucky Department of Insurance; Full page states licensed surplus-lines brokers must make a diligent effort to place with an admitted carrier before exporting coverage. Accessed 2026-09-28.
Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.