About $9 a month
Contractor surety bonds
Insureon average for construction and contracting customers, updated December 2023
Coverage guide
Contractor license and surety bonds
For contractors who need a bond to get licensed or to bid a job: what license and contract bonds cost, which rules require them and what a surety asks for.
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What similar businesses pay
- Contractor surety bonds
- About $9 a month
- Minimum bond premium
- Often $100 a year
- $10,000 bond
- $50–$1,000 a year
Published benchmarks, not quotes. Your price depends on underwriting.
Cost
What contractor license and surety bonds costs
Often $100 a year
Minimum bond premium
Insureon, for bonds of $50,000 or less, updated July 2026
$50–$1,000 a year
$10,000 bond
Insureon surety bond cost example, updated July 2026
$500–$10,000 a year
$100,000 bond
Insureon surety bond cost example, updated July 2026
You pay a premium that is a percentage of the bond amount, not the full amount. Insureon puts most surety bond premiums between 1% and 15% of the bond amount, usually paid yearly, and says most small businesses buy bonds of $50,000 or less and pay a minimum premium that is often $100. Its construction and contracting customers paid an average of about $9 a month. A license bond such as California’s $25,000 contractor bond usually sits near the low end for an owner with good credit. Performance and payment bonds on a large project cost far more, because the surety is guaranteeing the whole job.
What moves your price
- The bond amount (penal sum) the state or project owner sets
- Your personal and business credit and financial history
- License bond or contract bond: a performance bond on a large job costs far more
- Years in business and the size of jobs you have completed
- Past bond claims or unresolved customer complaints
- The state and license classification, such as general or specialty
Who it’s for
Who needs contractor license and surety bonds
You apply for or renew a contractor license
Many states will not issue a license without a bond on file. California requires a $25,000 contractor license bond, and Washington requires $30,000 for general contractors or $15,000 for specialty contractors, plus general liability insurance.
A homeowner says you broke the contract
In California, homeowners, anyone damaged by a willful and deliberate violation of a construction contract and employees owed wages can claim against your license bond. They file with the surety, which investigates; the CSLB handles complaints against the license.
Your bond lapses and the license goes with it
The CSLB cancels a license bond 30 days after it receives a cancellation notice, and suspends the license if no replacement arrives. Unpaid premium or a surety payout can trigger cancellation, and the CSLB warns that bond and license renewals often run on different cycles.
You bid a federal job over $150,000
FAR 28.102-1 requires performance and payment bonds on federal construction contracts above $150,000, in place before the notice to proceed. State and local agencies and many private owners set their own bond rules in the bid documents.
You win a bid but cannot take the job
A bid bond protects the project owner if you are awarded the contract and do not go ahead. Insureon explains that the owner is reimbursed the difference between your bid and the next lowest bid, and the surety will look to you to repay it.
A newer firm cannot qualify for bonding
The SBA guarantees bid, performance and payment bonds so sureties can bond small businesses that might not meet their usual criteria. It covers contracts up to $9 million, or $14 million for federal contracts, but not license and permit bonds.
Coverage
What contractor license and surety bonds covers
Contractor license bond
Required by a state licensing agency to get or keep a license. It protects consumers and the state, not you, up to the bond amount.
Bond of qualifying individual
California may require a separate $25,000 bond for the qualifying individual on a license, in addition to the contractor bond, under Business and Professions Code 7071.9.
Bid bond
Guarantees the project owner that you will sign the contract and provide the required performance and payment bonds if your bid wins.
Performance bond
Guarantees you will finish the job under the contract terms. If you do not, the owner is reimbursed for its financial losses up to the bond amount, according to Insureon.
Payment bond
Guarantees that your subcontractors and suppliers are paid on the project, which keeps them from chasing the owner. Federal jobs over $150,000 require one.
Maintenance and other ancillary bonds
Guarantee obligations outside performance and payment, such as a maintenance period after completion. The SBA lists these as ancillary bonds.
General liability alongside the bond
A bond does not pay for injuries or property damage you cause. Washington requires general liability of $200,000 bodily injury and $50,000 property damage, or $250,000 combined, alongside the bond.
What it doesn’t cover
- Your own losses: the surety pays a valid claim, then expects you to repay it
- Accidental injury or property damage on a job, which falls to general liability
- Injuries to your own workers, which fall to workers’ compensation
- Employee theft from clients, which needs a fidelity bond or crime insurance
- Amounts above the bond’s penal sum
- Claims after the bond is canceled and not replaced
Rules
Requirements and filings
License bonds are set by each state’s licensing agency, and contract bonds by the project owner. Federal construction work follows the Bonds statute, formerly the Miller Act, as applied in the FAR. Check the exact amount and form your agency or bid documents require.
| Requirement | Applies to | What it means |
|---|---|---|
| Federal performance and payment bonds | Prime contractors on federal construction contracts over $150,000 | Both bonds required under 40 U.S.C. chapter 31, subchapter III, per FAR 28.102-1, and furnished before the notice to proceed. |
| Federal payment protection | Federal construction contracts over $35,000 up to $150,000 | The contracting officer selects two or more protections, such as a payment bond, irrevocable letter of credit or tripartite escrow, per FAR 28.102-1. |
| California contractor license bond | Every active California contractor license | $25,000 since January 1, 2023 under Senate Bill 607, per the CSLB. It must be on an Attorney General-approved form and reach the CSLB within 90 days of its effective date. |
| California bond of qualifying individual | Qualifying individuals where Business and Professions Code 7071.9 applies | $25,000, in addition to the contractor license bond, per the CSLB. |
| California disciplinary bond | Contractors reinstating or reapplying after revocation or certain suspensions | At least $25,000 and up to 10 times the license bond, kept on file for at least two years, per the CSLB. |
| Washington contractor registration bond | Contractors registering with Washington L&I | Continuous surety bond of $30,000 for general contractors or $15,000 for specialty contractors since July 1, 2024, plus general liability insurance, per L&I. |
| SBA surety bond guarantee | Small businesses bidding contracts up to $9 million, or $14 million federal | The SBA charges 0.6% of the contract price on guaranteed performance and payment bonds and nothing on bid bonds. The surety still reviews credit, capacity and character. |
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Pay less
How to lower the cost
- Check your credit before you apply: Insureon names credit and financial history among the main drivers of the rate.
- Bond for the classification you hold: in Washington a specialty contractor needs a $15,000 bond, not the $30,000 general contractor bond.
- Arrange the renewal bond four weeks before the old one expires, as the CSLB advises, so a lapse does not suspend your license.
- Settle customer disputes before they become bond claims: a payout can cancel a California bond and raise future rates.
- If standard sureties decline your contract bonds, ask an SBA-authorized surety agency about a guaranteed bond.
- Compare sureties at renewal; Florin is an independent broker that compares options from several insurers.
Before you start
What underwriters ask for
- License or registration number, state and classification
- The bond amount and form your licensing agency or project owner requires
- Names, home addresses and consent to a credit check for each owner
- Years in business and your largest completed job
- For contract bonds: financial statements and a schedule of jobs in progress
- Bid documents with the owner, contract price, bid date and bond terms
- Any past bond claims, license discipline or open complaints
- A current general liability certificate if your state requires one
Common questions
Contractor license and surety bonds: questions
Is a surety bond the same as insurance?
No. A bond guarantees your customer or the state that you will meet your obligations, and Insureon notes the surety relies on you to pay back what it pays out. Fidelity bonds are the exception and work more like insurance.
What does licensed, bonded and insured mean?
Licensed means you hold the state license, bonded means a surety bond is on file and insured means you carry liability insurance. Washington requires both a bond and general liability insurance to register.
Can I get a contractor bond with bad credit?
Often yes, at a higher rate: Insureon says riskier accounts can pay 10% or more of the bond amount, against as little as 1% for low-risk ones. For contract bonds, the SBA guarantee program helps sureties bond firms that might not otherwise qualify.
Who can file a claim against my California contractor bond?
The CSLB says claims can come from homeowners, anyone damaged by a willful and deliberate violation of a construction contract and employees not paid their wages. Claimants file with the surety, not the CSLB.
Can I post cash instead of buying a bond in California?
Yes. The CSLB accepts a cashier’s check in the full bond amount, but that ties up $25,000 and a consumer must sue to reach it.
How often do I pay for a license bond?
Insureon says premiums are typically paid each year. Many state bonds, such as Washington’s continuous contractor bond, stay in force until canceled, so keep paying as long as you hold the license.
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Sources (8)
- Insureon: surety bonds cost (updated July 24, 2026)
- Insureon: surety bonds for construction and contracting (updated December 8, 2023)
- Insureon: small business bonds
- Acquisition.gov: FAR 28.102-1, performance and payment bonds (FAC 2026-01)
- California CSLB: bond requirements
- California CSLB: bond basics
- Washington L&I: register as a contractor
- U.S. Small Business Administration: surety bonds
Figures are published third-party estimates, not quotes. Coverage depends on policy terms and underwriting, and rules vary by state. Updated October 2026.