Surety bonds for contractors
From your first license bond through a permanent bond line for repeat contract work. Prime, standard and specialty markets on one desk — with bad-credit programs when the general market declines.
Which bonds a contractor actually needs at each stage
Contractors carry different bonds at different points in the project lifecycle. Getting the sequence right — and getting a bond line in place before it's needed — is what keeps repeat work moving without paperwork delay.
Before you can bid
A state contractor license bond ($5k–$50k typically) filed with the state contractor board is a precondition of holding a license in most trades — general, plumbing, electrical, HVAC, roofing, home-improvement.
At tender
A bid bond (usually 5–10% of the bid amount) guarantees you will honour your bid and post performance / payment bonds if awarded. Written at no cost on standard files.
On award
Performance and payment bonds — the pair the Miller Act (federal) and Little Miller Acts (state) require on public bonded work. On private work, the owner's contract dictates.
Mid-project
Change-order riders and bond increases if the contract value grows. Bond-line contractors handle these inside the existing capacity.
At close-out
Maintenance / warranty bonds running 1–2 years post-completion, common on public roadway and utility work.
All year
Contractor license bond renewals, contractor compliance bonds and state-permit bonds — calendared so no board sees a lapse.
How credit affects what you pay
Prime credit (720+). Standard markets, minimum-tier rates. License bonds often flat annual fees; performance and payment bonds price at roughly 1% of the bonded amount on the first $500k of contract, dropping on graduated rate schedules for larger contracts.
Standard credit (660–719). Standard markets still available, rate a step higher. Underwriter reviews personal financials and, for larger performance files, business financials and work-on-hand.
Sub-standard credit (600–659). Some standard markets pass; specialty markets pick up the file. Premium 1.5×–2× prime; performance bonds usually accepted with clean project economics.
Bad credit (below 600, tax liens, prior bankruptcy). Specialty desk only. Premium 2×–4× prime, and small-percentage cash collateral often required, but the bond issues so you can bid the job.
From first bond to permanent bond-line facility
Your first performance bond is the file the carrier uses to underwrite you, not just the job. Financials, personal indemnity, work-on-hand and prior contract history all go in. Once the carrier is comfortable, they extend you a bond line: a single-job limit and an aggregate. Inside those limits, new performance and payment bonds issue same-day, without a per-file underwrite.
The line grows with you. As financial statements improve and completed-contract history accumulates, the single-job limit and the aggregate get raised on the annual review. Contractors that place all of their surety through one broker over multiple years tend to end up with the biggest lines — the carrier's confidence compounds.
State contractor board requirements — the short version
Most states require a license bond as a precondition of holding a contractor's license. Amounts range from $5,000 (small home-improvement) to $50,000+ (general contracting or specialty trades). The bond form and amount are set by the state contractor board; filing is usually electronic through the board's portal. We keep the top state forms on file — New Jersey Home Improvement Contractor, New York Home Improvement Contractor, California CSLB, Florida DBPR, plus the neighbouring-state contractor bonds most of our book files — and pull the correct form from the licensing board for out-of-state filings.
What we do when the standard market declines
The specialty desk exists exactly for the file the general market said no to. If a prior surety declined for credit, tax liens, prior bankruptcy or a distressed financial statement, tell us up front — hiding history slows the file more than an honest disclosure. A specialty file typically requires: a written explanation of the credit event, current financials showing recovery, project economics that the underwriter can read as low-risk, and — on larger bonds — partial cash collateral (10–30% of the bond amount). The premium is higher; the bond still issues.
Frequently asked questions
Good to KnowCurrent business financials, personal financial statements from the owners, work-on-hand schedule, and personal-credit consent. The bigger the bond, the more the underwriter will want.
The single-job limit typically caps at 3–5× net working capital for first-time contract sureties; established lines can be many multiples of that with clean statement history.
Yes. Every carrier we use is Treasury Department Circular 570-listed. Miller Act files require audited or reviewed financials and typically three to seven business days on first submission.
Private-project owners commonly adopt the AIA A312 form. All our carriers write it; we check the owner's actual document and confirm acceptance before the bid closes.
Tell us about your contractor bond
Whether you need a one-time license bond or a permanent bond line for repeat contract work, send us the details and we'll quote it inside a business day. Anthony Spina personally reviews every new submission.
- 201-661-2381 — Anthony Spina, direct line
- aspina@acsbonding.com
- 1200 MacArthur Blvd., Suite 302A, Mahwah, NJ 07430
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