If you do construction work in the U.S., you'll run into surety bonds at multiple points: getting licensed, bidding public work, pulling permits, even renting equipment. Here are the 12 most common ones — and the mistakes that delay jobs.
1. License bonds (state-required)
The bond your state requires to issue your contractor's license (CA's $25K CSLB bond is the famous one). Mistake: letting it lapse — your license auto-suspends.
2. Permit bonds (city/county)
Required to pull permits for street, sidewalk, or right-of-way work. Mistake: assuming your license bond covers it. It doesn't.
3. Bid bonds
5–10% of the bid amount, required to bid most public projects. Mistake: waiting until bid day to get one — underwriting takes time.
4. Performance bonds
Guarantees you'll finish the job. Typically 100% of the contract value. Mistake: not knowing your single-job and aggregate capacity before bidding.
5. Payment bonds
Guarantees your subs and material suppliers get paid. Usually paired with performance. Mistake: letting unpaid subs file mechanics liens anyway because they didn't know there was a bond.
6. Maintenance / warranty bonds
Covers post-completion defects, usually 1–2 years. Mistake: not adjusting price to cover the bond cost on warranty-heavy work.
7. Subdivision / site improvement bonds
Required by municipalities for developers to guarantee public infrastructure gets built. Mistake: underestimating how much capacity these tie up.
8. Right-of-way / encroachment bonds
For temporary use of public space (dumpsters, fences, scaffolding). Mistake: not knowing each city has its own form requirements.
9. Supply bonds
Guarantees you'll deliver materials per a supply contract. Mistake: ignoring liquidated damages clauses in the bond form.
10. Lost-title / defective-title bonds
Lets you re-title a piece of equipment when paperwork is missing. Mistake: trying to do it through the DMV without the bond — they'll send you back.
11. Reclamation / environmental bonds
For excavation, landfill, mining, or hazardous work. Mistake: not getting underwriting started 60+ days before the job — these take time.
12. Customs / federal contract bonds
For federal projects under the Miller Act or import-export work. Mistake: assuming a state-licensed bond agent can write these — many can't.
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