You already know that you need surety bonds to work on public construction projects. The Miller Act made sure of that – requiring contractors planning to work on any contract exceeding $100,000 to post a payment and performance bond.

From bidding on a project to accepting and completing it to the quality and specifications outlined in the contract, construction bonds are required throughout many stages of public works or government projects.

But did you know that you may also need surety bonds for private-enterprise construction jobs?

Many private project owners require contractors to get bonded before bidding or taking on a job. This guarantees the owner will be protected if something goes wrong, such as the contractor reneging on the contract or damaging property midway through the project. It also covers issues we’ve been facing since the pandemic hit, like supply chain holdups and material cost increases.

In short, construction bonds reduce a private project owner’s risk and can save them a lot of money – especially in strange times.

Why do I need a construction bond for a private job?

Let’s quickly cover the basics. (We go more in-depth in Digging into Construction Bonds: A Complete Guide, so check that out for comprehensive information.) A construction bond, or contract bond, is an agreement between three parties that protects construction project owners and investors. It holds contractors in check according to the contract’s terms and specifications, ensuring they perform the work they agree to as promised. If they don’t, the bond protects the owner from further financial hardship.

As a contractor, here are a few examples of things that can go wrong and cost you or your client money:

  • Material shortages
  • Supply chain problems
  • Higher costs of construction materials
  • Fewer construction workers (or workers failing to show up for work)
  • Failing to finish a project on time or at all
  • Shoddy work
  • Project disruptions

The three parties that sign most construction-related surety contracts are the principal (contractor or subcontractor), the obligee (person or organization that requires the bond), and the surety (a company that issues and backs the bond).

Benefits of Surety Bonds for Private Construction Jobs

Surety bonds don’t only benefit private owners. They can also be advantageous for contractors and subcontractors.

Private project owners can limit risk.

The project owner can limit their top risks, including things entirely out of their hands. Issues like supply chain delays, liens, subcontractors becoming unavailable, or changes in material costs can all substantially to the price of a construction project. Bonds can cover all this and more, protecting owners and investors by guaranteeing compliance and work performance.

Contractors can tackle larger projects.

If you’re a contractor who needs to get bonded before taking on a private job, take heart. There are benefits of bonding for you, too. Being bonded can help you score bigger projects that you might otherwise have no chance of winning. They can put you ahead of your unbonded counterparts competing with you on a job.

As long as you abide by your contract terms and pay your subcontractors, you shouldn’t face a claim on your bond. Your surety should also be available to help if you have questions or concerns throughout the project or have a conflict with your obligee.

Types of Contract Bonds for Private Jobs

Here are some of the main types of construction bonds you may need in order to tackle your next private job successfully.

Bid Bond

A bid bond ensures that a contractor bidding on a project follows through if they win a bid. If the owner chooses your bid, typically the contractor must sign the contract the project owner offers them and honor it. The bond guarantees that the contractor has the resources needed to accept and fulfill the project requirements.

Performance Bond

A performance bond guarantees that a contractor will finish a project as specified in the contract. This includes completing it on time and within budget. 

Payment Bond

A payment bond guarantees payment to other parties involved in a project – laborers, suppliers, subcontractors, etc. It also protects the project owner by avoiding liens on their property.

Other Contractor Bonds

Here are several other bonds you may need at some point to accept or complete a construction project in a particular location or for a specific purpose:

How to Qualify for Construction Bonds for Private Projects

The cost of obtaining a construction bond (often 1-3% of the total bond amount) can deter some contractors. However, keep in mind that not being bonded and running into serious issues throughout the scope of your project could cost you a lot more. The outcome isn’t always in your hands. Your lenders, suppliers, or government may cause project disturbances and delays. Plus, some private project owners may not even consider you for a job without that extra layer of protection.

To qualify for different construction bonds, you must prove you have the financial means and business savvy to take on the project at hand and complete it successfully. Apply for the bond you need with a trusted surety provider like ZipBonds. Our intuitive online application process is fast and straightforward. We walk you through everything you need to apply successfully. As soon as your application is approved (often instantly), you can print your bond.

Apply for Construction Surety Bonds Today

Today, more private project owners require contractors to be bonded to protect investments and avoid high-risk situations. If you need any contract/construction bond for your next job, apply online today. Many contract bonds are approved and issued instantly.

Don’t hesitate to reach out with any questions along the way! You can reach us by phone (888.435.4191) or email us at