What Is a Bid Bond? The Surety Bond That Guarantees You Mean It

A bid bond is a surety bond submitted with a bid on a public or bonded private project. It guarantees that if the bidder is awarded the contract, they will actually sign it and post the required performance and payment bonds. If they refuse, the bid bond pays the owner the difference between the winning and the next bid. Here is what a bid bond is, how it's priced, and why it's the first of the three construction bonds most contractors encounter.