Bid Security (Bid Bond)

A bid bond is a type of surety bond used in the bidding process for construction projects. The bid bond protects the owner or developer from financial loss if the contractor bidding on the project fails to follow through with their bid.

How does a bid bond work?

If a contractor is awarded a construction project, they are required to post a performance bond to guarantee that they will complete the work as specified in their contract. If the contractor fails to do this, the owner or developer can make a claim on the performance bond to recover any damages incurred.

The contractor may also be required to post a payment bond, which guarantees that they will pay their subcontractors and suppliers for work completed on the project.

Why arebid bonds important?

Bid bonds are important because they protect owners and developers from financial loss if contractors fail to follow through on their bids. They also help ensure that contractors are able to pay their subcontractors and suppliers for work completed on the project.