Is a contractor bond the same as insurance?

No. A bond guarantees a third party that you will meet an obligation, and if the surety pays you repay it. Insurance protects you against your own losses. Contractors often need both.

What is the difference between a license bond and a surety bond?

A license or permit bond is a compliance bond for licensing. Contract surety bonds, bid, performance, and payment, are required on projects. They serve different purposes.

How do I qualify for contract bonds?

Sureties underwrite your finances, credit, and experience. Presenting strong financials and a solid track record builds your bonding capacity. We help you prepare.

Where do I verify my bond requirement?

With your state contractor licensing board for license bonds and the contracting agency for project bonds. Requirements vary, so confirm rather than assume.

The Contractor Licensing & Bond Guide

Licensing, license bonds, and contract bonds, explained.

Licensing and bonds confuse a lot of contractors, partly because a bond is not insurance and partly because the rules vary so much by state. This guide explains the difference between license bonds and contract bonds, how each works, and what to verify. It is general information, not legal advice.

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Contractors deal with two broad bond types. License and permit bonds are compliance bonds required to be licensed or pull permits. Contract bonds, bid, performance, and payment, are required on larger and public projects. A bond is a guarantee to a third party, not insurance for you, and requirements vary by state and project.

Bonds are not insurance

This is the core point. A bond is a three-party guarantee: a surety promises an obligee, a licensing board, a project owner, that you will meet an obligation, and if you do not and the surety pays, you repay the surety. Insurance, by contrast, protects you against your own losses. A bond is closer to credit, which is why sureties underwrite your finances and credit.

License and permit bonds

Many states require a license bond to be licensed, and many municipalities require permit bonds. They guarantee that you will operate within the rules and pay valid claims. Amounts and requirements vary by state, jurisdiction, and license class, and renewals can change them. Most are inexpensive and can be obtained quickly, often online.

Contract bonds for bigger work

When you bid larger and public projects, the owner often requires contract bonds: a bid bond to honor your bid, a performance bond to complete the work, and a payment bond to pay subs and suppliers. Qualifying depends on your financial strength and track record, and building bonding capacity is what lets you pursue larger contracts over time.

Verify and align

Because licensing and bond rules vary and change, verify your specific requirement with the licensing board or contracting agency, and make sure your insurance and bonds line up with what your license and contracts require. We place both and coordinate them.

Licensing, license bonds, and contract bonds, explained.

Bonds are not insurance

License and permit bonds

Contract bonds for bigger work

Verify and align

Common questions.

Not sure which bond you need?

Keep going.

Contractor Bonds

Surety Bonds

Licensing & Compliance

Get the licensing and bonds right.