Surety One, Inc. provides unmatched support of your contract surety bond needs. Our surety underwriting specialists and support staff are responsive and knowledgeable. These qualities facilitate expeditious review and response to your bid bond and performance bond / payment bond request.

Not all surety underwriters are equal. If you do not enjoy polite, clear communication and immediate attention to what is important to your enterprise, then you are collaborating with the WRONG UNDERWRITERS! Please give us the opportunity to demonstrate to you what real service is.

Performance Bonds & Payment Bonds

A surety performance bond protects a project owner from financial loss should the bonded contractor fail to fulfill the contract in accordance with its terms and conditions. Performance bonds are usually packaged with payment bonds, which assure that suppliers of labor and material will be paid. A one-year maintenance provision is also a customary guarantee of a performance bond.

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Subdivision Performance Surety Bonds

A surety subdivision bond is required by a municipality when a developer of a subdivision must construct improvements, which will eventually become part of the public domain. Examples are gutters, curbs, sidewalks, and similar subdivision needs. These are often called completion bonds or site improvement bonds. The subdivision bond guarantees completion of improvements in accordance with the local governing body’s codes and requirements.

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Commercial Contract Performance Bonds

Surety performance bonds can be written to support non-construction service and supply agreements. Internet technology, janitorial, security and transportation contracts are examples. Service contract performance bonds are underwritten differently because of the nature of particular service agreements, coverage for multiple locations, and differences in bidding practices. Surety One, Inc. has a broad appetite for these performance bond requests!

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Contract bonds provide superlative protection to project owners, laborers/sub-contractors and material suppliers. The contractors that are obligated to provide payment and performance bonds also benefit from the requirement. The contractor’s market position is enhanced by a surety company’s prequalification of his or her bondability. Simply, surety prequalification increases a contractor’s credibility. Project owners, financial institutions, materials suppliers and sub-contractors are more likely to extend preferred terms, lower interest rates and better pricing to contractors backed by strong corporate surety companies.

Competition between contractors, climatic changes, the volatility of material and equipment costs, the cyclical nature of most industries, the scarcity of a qualified and dependable labor pool, and the softening/hardening of credit terms are only a few of the many risks that the typical contractor must manage. A contract surety bond company should understand all of these factors and be prepared to offer performance bond capacity to the greatest extent possible while simultaneously serving as a “second set of eyes” for the contractor, limiting surety capacity where the contractor is overextending himself. A contract bond underwriter must effectively assess a contractor’s capital position, talent, experience and overall character then clearly communicate the surety’s position and the reasons for his or her decisions. Ideally, the relationship between a contractor and performance bond underwriter should be friendly, honest and respectful. A contractor must be told what he “needs” to hear, rather that what he “wants” to hear, and more specifically where the surety elects to decline the contractor’s request. If this is the type of relationship is what you seek, we are waiting to hear from you.


The American Subcontractors Association in collaboration with the National Association of Surety Bond Producers and the Surety and Fidelity Association of America, have produced the following compendium of P3 laws and current bonding requirements. As the popularity of public private partnerships grows, these laws and the performance bond requirements will change.
Public-Private Partnership Laws in the States


As a result of mass internet access and the growth of trustworthy multi-national banking institutions, contractors are more likely than ever to consider accepting projects outside of the United States. The United States is also a very attractive environment for foreign contractors wishing to accept work within the states and territories. International surety bond underwriting presents significant obstacles. For the U.S. contractor performing abroad the chief concerns are the extraordinary geographic footprint and the trustworthiness of the legal forums in which disputes may be settled. In the case of reverse flow international surety bonding, the drafting and perfection of international indemnity agreements, proper analysis of financial statements prepared to foreign standards, claims and collections issues, and the proper premium rating for bonds issued for less than full value of contracts represent significant deviations from standard U.S. surety underwriting practices. An international surety underwriter should possess superlative working knowledge of advance payment bonds (very popular across latin america), reverse flow bonding, cultural differences and business social protocols of the country in which work is performed, and the necessary language skills to maintain open lines of communication. Demand for international surety bonds, advance payment bonds and international financial guarantee will continue to grow, requiring surety companies to commit themselves to understanding and underwriting them.

Performance Bonds Are a Requirement on Federal Work

The Miller Act (40 U.S.C. §§ 3131-3134) is the federal code which requires contract surety bonds on federal construction project. The mechanism is implemented through the Federal Acquisition Regulations (48 CFR Subpart 28.1). The Code obligates a general contractor on a federal job to file a performance bond AND a payment bond when said project exceeds $150,000 for the construction, alteration or repair of any building or public work belonging to the United States. A corporate surety company issuing these bonds must appear on the U.S. Treasury’s circular (“T-List“) of sureties acceptable for federal obligations.

A “performance bond” must be executed in an amount that the contracting officer deems “adequate” to protect the federal government. The Acquisition Regulations suggest that 100% of the contract price should be the requirement. Exceptions can be made but only by a specific determination by the federal contracting officer who justifies that a lesser amount is adequate.

A “payment bond” is required to ensure that suppliers of labor and materials will be paid for their products and services. The amount of the payment bond must be equal to the total amount payable under the terms of the contract. As with the performance bond, 100% of the contract price is generally the rule. A deviation must likewise be justified by the federal contracting officer by written determination supported by his or her specific findings of fact that the payment bond amount is impractical. The payment bond penalty may NOT be less than the amount of the performance bond. Payment bonds must be posted when the contract value is in excess of thirty thousand dollars ($30,000). The Miller Act payment bond covers subcontractors and suppliers of material who have direct contracts with the prime contractor. These are called first-tier claimants. The payment bond also covers subcontractors and material suppliers that have contracts with a subcontractor. These claimants are called second-tier claimants.

Performance Bonds Are “Often” Required on State and Local Work

Most states have implemented “little Miller Acts” for state-owned projects. Local municipalities also often require payment and performance bonding for contracts that exceed a specific threshold. Those surety bond requirements are generally defined in local requests for proposals (RFPs).

When a “Contractor’s Bond Is Not a Performance Bond”

There is sometimes confusion about what exactly a contractor might need when he or she is told to provide bond. Private and public project owners, state licensing boards and local municipalities all may require a contractor to file a surety bond of one type or another to guarantee very specific things. In additions to bid, performance and payment bonding a contractor may need the following:

License & Permit Bonds (L&P) – required by states and municipalities to issue a contractor license. These may be simply “obey the code” obligations, or can include onerous wage guarantees.

Third Party Fidelity Bonds – also known as dishonesty bonds, insure dishonesty losses resulting from the contractor and his or her employees’ actions while providing services on a client’s premises (this is what a party refers to when he says, “We are bonded.”).

Contract performance bonds: bid bonds, payment and performance bonds for particular projects.