Bid Bonds

A bid bond is a surety's guarantee, submitted with your bid, that you are bidding in good faith: if you are the winning bidder, you will sign the contract and provide the required performance and payment bonds. If a low bidder walks away or cannot qualify for the final bonds, the bid bond protects the project owner — usually up to the difference between the low bid and the next acceptable bid, capped at the bond amount.

When is a bid bond required?

Bid bonds are standard on publicly bid construction work — federal, state, county, city, and school projects — and many private owners and general contractors require them too. The bid documents state the requirement and the bond amount, commonly expressed as a percentage of the bid. Submitting a bid without the required bond is one of the most common reasons an otherwise winning bid gets thrown out as non-responsive.

Bid bonds and bonding capacity

A surety does not issue bid bonds one at a time in a vacuum — it extends a line of bonding capacity based on your experience, financial statements, and work in progress. Contractors who bid bonded work regularly should have that relationship and capacity in place before a bid date is announced, not during bid week. If you are new to bonded work, starting the underwriting conversation early is the difference between bidding and watching.

How to get a bid bond

Tell us the project, the owner, the bid date, and the estimated bid amount. Straightforward requests for contractors with an established bond line move fast; first-time bond lines need financials and lead time. Call 251-333-4750 (AL) or 228-206-3853 (MS), or start with our surety bond overview.

United Risk Agency, Orange Beach, Alabama. Licensed in AL, FL & MS. Alabama agents, serving Orange Beach, Gulf Shores, Foley, Mobile and statewide across Alabama, plus the Mississippi Gulf Coast.