Bid bonds, performance bonds, payment bonds, and contractor license bonds for Georgia construction businesses.
A contract bond, often called a construction bond, guarantees a project owner that a contractor will perform the work as agreed and pay the subcontractors, laborers, and suppliers along the way. It's a three-party guarantee: the contractor (principal), the project owner (obligee), and the surety company backing the bond. If the contractor defaults, the surety steps in to cover a valid claim, then looks to the contractor to repay that cost.
Bid Bond: guarantees that if you win a competitive bid, you'll sign the contract and provide the required performance and payment bonds. Protects the project owner from a contractor backing out after winning.
Performance Bond: guarantees the project gets completed according to the contract's terms, specifications, and timeline.
Payment Bond: guarantees your subcontractors, laborers, and material suppliers get paid for their work on the project.
Contractor License Bond: required by some Georgia license classes as an alternative to meeting certain net worth thresholds.
Maintenance / Warranty Bond: covers defects in materials or workmanship for a set period after a project is completed.
Subdivision & Site Improvement Bonds: guarantee developers complete required infrastructure like roads, drainage, or utilities before a subdivision is finalized.
Most contract bonds run 1% to 3% of the full bond amount annually for contractors with solid personal credit and financials. Larger public projects typically require fuller underwriting (personal and business financial statements, a credit check, and sometimes a bank reference), which can shift your rate up or down. Brannon shops multiple surety markets to find the best fit for your credit profile and project size.
These three bonds often travel together on public construction projects but serve different purposes. A bid bond only matters before you win the job. It guarantees you'll follow through if selected. Once you're awarded the contract, the performance bond and payment bond take over: performance protects the project owner's interest in a completed job, while payment protects everyone you owe money to along the way.
A contract bond, also called a construction bond, guarantees that a contractor will complete a project according to the terms of the contract and pay the subcontractors and suppliers involved. If the contractor fails to do either, the project owner or the unpaid parties can file a claim against the bond.
A bid bond guarantees that a contractor who wins a bid will sign the contract and provide the required performance and payment bonds. A performance bond guarantees the project gets finished according to the contract terms. A payment bond guarantees subcontractors, laborers, and suppliers get paid. Public projects often require all three together.
It depends on your license class and whether you meet the state's net worth requirements. A surety bond can serve as an alternative to meeting certain net worth thresholds for some residential and general contractor license classes. Brannon will confirm exactly what your specific license requires.
Most contract bonds cost 1% to 3% of the bond amount for contractors with solid credit and financials. Larger or riskier projects may require full underwriting, including financial statements and a credit check, which can affect your rate.
Typically your personal credit information, basic business financials, the project scope and contract value, and sometimes a bank reference. Smaller bonds can often be quoted quickly; larger bonds go through fuller underwriting.
No. Surety companies charge the same premium whether you buy directly or through an agent like Brannon. The surety pays the agent's commission out of their own overhead, not by charging you extra. Brannon shops multiple surety markets on your behalf to find your best rate.
Looking for a different type of bond? See Court & Fiduciary Bonds, Commercial Bonds, or the full Surety Bonds overview.