Last Updated: May 2026 by the ZipBonds Team
Requirements are current as of May 2026 based on Michigan statutes. Always verify requirements in project bid documents and with the awarding authority.
In Michigan, construction bond requirements kick in at a lower threshold than many other states—meaning contractors often need bonds earlier when pursuing public work. Understanding when bonds are required and how quickly you can get approved can directly impact your ability to win projects.
Michigan projects commonly require:
- Bid bonds during competitive bidding
- Performance bonds after contract award
- Payment bonds to protect subcontractors and suppliers
These requirements primarily apply to public works projects, but many private developers across Michigan also require bonding on larger or higher-risk jobs.
ZipBonds helps contractors across Michigan secure fast approvals, competitive rates, and expert support for construction bonds of all sizes.
Quick Summary: Michigan Construction Bond Requirements
- Michigan public projects typically require performance and payment bonds.
- Bid bonds are commonly required during the bidding process.
- Michigan’s Little Miller Act (MCL §129.201–129.211) governs bonding requirements.
- Construction bonds are generally required for public projects exceeding $50,000.
- Performance and payment bonds are typically required for 100% of the contract amount (legally not less than 25%).
- Public entities may require bonds on smaller projects depending on risk.
- Private projects may also require bonding depending on the developer or lender.
Michigan Construction Bond Requirements by Project Size
| Project Type | Are Bonds Required? | Typical Requirement |
|---|---|---|
| Small public projects (< $50,000) | Sometimes | May not require bonds unless specified |
| Public projects > $50,000 | Yes | Performance & Payment (typically 100%, minimum 25%) |
| Private projects | Usually no | Contract-specific |
What are construction bonds?
Construction bonds are financial guarantees required on public projects to ensure the contractor completes the work as agreed and pays all subcontractors and suppliers. If a contractor fails to meet their obligations, the bond protects the project owner and others involved.
Do you need a construction bond in Michigan?
You’ll typically need a construction bond in Michigan if:
- You’re bidding on a public construction project
- The total contract amount exceeds $50,000
- You’re a general contractor awarded the project
- The project requires a bid bond at submission
- The contract requires performance and payment bonds before work begins
For smaller public projects under $50,000, bonding may not be required unless specified by the contracting agency.
Most private construction projects in Michigan do not require bonds unless they are specifically required by the project owner, lender, or contract terms.
Michigan Construction Bond Requirements (Legal Overview)
In Michigan, public construction bonding requirements are governed by Michigan’s Little Miller Act (MCL §129.201 et seq.).
Under this law:
- Contractors working on public construction contracts exceeding $50,000 must furnish performance and payment bonds.
- These bonds must typically be provided before work begins or at contract award.
- The purpose is to protect: The public entity (project owner), subcontractors, laborers, and suppliers
Some public projects, including school construction, may have additional bonding or procurement requirements depending on the agency.
Performance and payment bonds may be issued as separate bonds or combined into a single instrument. They must be provided in an amount set by the governmental unit, but not less than 25% of the contract amount (commonly 100%).
Bonds must also be issued by a surety authorized to do business in Michigan. While the $50,000 threshold is defined by statute, public entities may still require bonding on smaller or specialized projects at their discretion.
For a deeper breakdown of how these requirements impact approvals and contractor capacity, see our Performance Bond Guide and Construction Bond Ultimate Guide.
What types of construction bonds are required in MI?
1. Bid Bond
You must submit a bid bond with your bid to guarantee you’ll accept the contract and provide the required bonds if awarded.
In Michigan public bidding, bid bonds are commonly required at 5%–10% of the total bid amount, depending on the project and agency. If you fail to move forward after winning the bid or cannot provide the required bonds, the project owner may file a claim.
2. Performance Bond
A performance bond ensures the project is completed in accordance with the contract terms.
3. Payment Bond
A payment bond guarantees that subcontractors, laborers, and suppliers are paid as promised.
4. Michigan Contractor License Bond (No Statewide Bond Requirement)
Michigan does not require a universal statewide contractor license surety bond for most general contractors. Instead, contractors are licensed through the Michigan Department of Licensing and Regulatory Affairs (LARA).
For certain license types—such as Residential Builders and Maintenance & Alteration Contractors—financial responsibility is demonstrated through general liability insurance (typically $100,000 per occurrence / $300,000 aggregate) rather than a surety bond.
Some municipalities or specialized trades may require bonds at the local level, but Michigan does not have a standard statewide requirement for contractor license bonds.
Learn more about Michigan contractor license bond requirements.
How much do Michigan construction bonds cost?
Construction bond costs in North Carolina depend on:
- Project size (bond amount)
- Contractor financial strength
- Experience and track record
- Credit score
Typical Cost Range:
- 0.5%–3% of the total bond amount for well-qualified contractors
- Higher rates for new businesses, lower credit, or higher-risk projects
Example:
- $500,000 project → ~$2,500–$15,000 bond cost
Apply in minutes to get a fast, competitive quote from ZipBonds.
How to Get Your Construction Bonds
Getting bonded is simple with ZipBonds. Michigan contractors often need bonds quickly to avoid losing awarded projects. ZipBonds helps streamline that process.
Step 1: Apply Online
Submit a short application with basic business and project details.
Step 2: Submit Supporting Documents (if needed)
For larger projects, you may need:
- Business financial statements
- Work-in-progress (WIP) schedule
- Project details and contract information
- Resume of completed projects
- Personal financials (for larger bonds)
Step 3: Get Approved
We approve many bonds within 24 hours — often the same day.
Step 4: Receive Your Bond
Once approved and paid, your bond is issued and ready for submission.
Bond Forms & Submission Requirements in Michigan
Many Michigan public agencies require bonds to be submitted on specific forms, such as AIA bond forms or agency-specific templates. Submitting the incorrect bond form can delay project approval, so it’s important to confirm requirements in the bid or contract documents.
Construction Bonds in Major Michigan Cities
Construction Bonds in Detroit
Public construction projects follow Michigan state bonding requirements, with additional requirements outlined in city bid documents. Contractors can view opportunities through the City of Detroit procurement portal.
Construction Bonds in Grand Rapids
Most municipal projects require bonding consistent with state law. Contractors should review project-specific requirements in bid documents. See the City of Grand Rapids procurement portal for project opportunities and bidding.
Construction Bonds in Ann Arbor
Public works projects in Ann Arbor follow Michigan’s Little Miller Act and state bonding requirements. Contractors should review project-specific bid documents for exact details on performance, payment, and bid bonds. Current opportunities and procurement information are available through the City of Ann Arbor procurement portal.
Do private projects require construction bonds in Michigan?
Private construction bond requirements in Michigan are common on commercial and institutional projects, but they are not governed by statute.
You may need construction bonds for:
- Commercial developments
- Industrial or infrastructure projects
- Multi-family residential builds
Unlike public projects, private bonding requirements are contract-driven. Some developers require performance and payment bonds for 100% of the contract value, while others may require reduced coverage or no bonding at all.
Common Reasons Construction Bonds Get Denied
Construction bond approvals depend on financial strength, experience, and project fit. Common reasons for delays or denials include:
- Limited financial history or weak financials
- Low credit score
- Taking on a project larger than past experience
- Incomplete or inaccurate application information
ZipBonds works with contractors to overcome these challenges and find the best available bonding options. Learn more about our solutions for hard-to-place bonds.
What happens if someone files a claim on my bond?
If a contractor fails to meet contractual obligations or pay subcontractors, the project owner or affected parties may file a claim against the bond.
The surety will investigate the claim and may:
- Pay valid claims
- Arrange for project completion
- Seek reimbursement from the contractor
Claims are relatively rare among qualified contractors, but they highlight the importance of strong financials and project management.
FAQs About Michigan Construction Bonds
Construction bonds are typically required for public projects exceeding $50,000 (with bond amounts set by the agency, but not less than 25% of the project cost). However, some public entities may require bonding on smaller projects depending on risk or funding requirements.
Not all projects require bonds, but most public construction contracts over $50,000 will require both performance and payment bonds. Always check the bid documents, as requirements can vary by agency.
No. Bid bonds are not required by statute, but they are commonly required in public project bid documents—typically at 5%–10% of the bid amount.
Most contractors pay between 0.5% and 3% of the total bond amount. Rates depend on credit, financials, experience, and project size.
Many bonds can be approved the same day or within 24 hours, especially for smaller projects. Larger projects may require additional financial review.
Yes. While stronger credit helps secure lower rates, bonding options are available for contractors with lower credit scores, especially with the right project and financial support.
If a bond is required and you cannot provide it, you may:
- Lose the project award
- Forfeit your bid (if a bid bond was required)
- Be unable to move forward with the contract
Michigan has a lower statutory threshold ($50,000) than many states, meaning contractors are more likely to encounter bonding requirements—even on smaller public projects.
Apply for a Construction Bond Today
Need a performance and payment bond for your next project? Gather essential information like your bid amount, bid date, business history, and credit score, and we’ll do the rest. Select your state below to begin our simple bonding process. Call (888) 435-4191 or email support@zipbonds.com to speak directly with an agent.
About ZipBonds.com
Founders Ryan Swalve and Zach Mefferd formed the vision for ZipBonds.com when they realized how overly complicated it was to help clients place surety. The frustration of being unable to incorporate the technology they’d used in other insurance-focused projects left them thinking “there has to be a better way.”
Fast forward a couple of years, and that better way is the impetus of everything we do at ZipBonds. We constantly look for innovative ways to improve the bonding process for our clients and agents. Our team comprises individuals who understand all angles of surety – for companies, agencies, and individuals. Incorporating everyone’s point of view to improve the process while simultaneously integrating cutting-edge technology is what sets our business apart.