The cost of a surety bond varies based on the bond type, size, and the strength of the organization, typically ranging from 0.5% to 3% of the contract price for contract bonds. Bond companies evaluate applicants based on three key factors: character, capacity, and credit, each assessed using different criteria. Important traits include a proven track record, relevant experience, proper equipment access, financial strength, and timely payment history with subcontractors and suppliers.

1. What does a Surety
bond cost?
The cost of a bond depends on the type of bond as
well as other factors such as the size of bond and
strength of the organization. For contract bonds, the
cost is usually between 0.5% and 3% of the contract
price.

2. What does a Bond
Company look for?
Bond companies are interested in the Three “C’s” -
character, capacity and credit. However, each surety
company uses a different formula that values different
traits slightly different.

3. These traits include:
• A good track record of completing jobs on schedule and within
budget
• Has the experience that matches the requirements of the
contract
• Has or can obtain the necessary equipment needed to perform
the work
• The surety also wants to make certain the contractor has the
financial strength to support the desired work program and has
a history of paying subcontractors and suppliers promptly.
• The surety wants to see that the contractor is in good standing
with a bank established a line of credit