What is a California Contract Bond?
California contract bonds, also known as California construction bonds, are a category of surety bonds that provides a guarantee that a contract will be fulfilled. While they are used in a range of circumstances, they are most commonly used in construction projects.
Who Needs a California Contract Bond?
California contract bonds are most commonly required by government agencies for work on a public construction project, but more private companies are requiring the bonds, too. Therefore, nearly every contractor will be necessary to obtain a California contract bond at some point.
Why Do I Need a California Contract Bond?
Contract bonds assure that the project developer will recover any financial losses if the contractor doesn’t complete a contract. Since the term “contract bond” refers to a category of California surety bonds, many types of contract bonds may be required at different stages of a project to ensure it is completed according to the contract.
How Much Does a California Contract Bond Cost?
The cost of a California contract bond will vary depending on the type of surety bond required for your role in a project. Additionally, California contract bonds are subject to underwriting, and therefore are dependent on the credit score of the contractor. Those with good credit may find premiums as low as 1% of the bond.