Why Are Performance Bonds Needed?
A Performance Bond is required on many public and private construction projects to guarantee that the contractor will complete the project according to the contract terms. It protects project owners from delays, financial losses, or substandard work if a contractor defaults or fails to meet their contractual obligations. Many public works projects in California legally require performance bonds under the Miller Act (for federal projects) and the California Little Miller Act (for state and local projects).
Performance Bonds primarily protect the Obligee, which is usually the project owner or general contractor. If the bonded contractor fails to complete the project, meet specifications, or honor contract terms, the surety steps in to either:
✅ Provide financial compensation so the owner can hire another contractor.
✅ Step in and complete the project through another contractor or partner.
While performance bonds protect the project owner, they also benefit subcontractors and suppliers by ensuring the job moves forward even if the original contractor defaults.
At JRG Surety, we work with multiple surety companies to find the best possible rate for performance bonds, which typically range from below 1% to 3% of the contract amount. Surety underwriters assess contractors based on the Three C’s of Surety Credit:
✔ Character – The contractor’s reputation, business history, and track record.
✔ Capacity – The contractor’s experience, expertise, and ability to complete the job.
✔ Capital – The contractor’s financial strength, working capital, and net worth.
By partnering with top-rated sureties, JRG Surety helps contractors secure the lowest rates and best terms for performance bonds, ensuring they can take on projects confidently.
Need a Performance Bond? Contact JRG Surety Today for a Free Quote!
Please reach us at suretybondsupport@jrgsurety.com if you cannot find an answer to your question.
A Performance Bond is a surety guarantee that ensures a contractor will complete a project according to the terms of the contract. If the contractor fails to perform, the surety company may either:
✅ Hire another contractor to complete the work
✅ Compensate the project owner for financial losses
Performance Bonds are typically required on public works projects and many private construction jobs to protect the project owner from delays, financial losses, or poor workmanship.
The cost of a Performance Bond ranges from below 1% to 3% of the total contract amount, depending on factors such as:
✔ Contractor’s Experience – More experienced contractors may qualify for lower rates.
✔ Financial Strength – Strong financials lead to better bonding terms.
✔ The Three C’s of Surety Credit – Character, Capacity, and Capital are key underwriting factors.
At JRG Surety, we work with multiple sureties to find the best rate available for each contractor.
To qualify for a Performance Bond, a contractor must provide:
📌 Company financial statements (balance sheet, income statement)
📌 Project details (contract amount, scope, timeline)
📌 Business history & experience
📌 Personal financials (if required for underwriting)
At JRG Surety, we simplify the process and help contractors get bonded quickly and at the best possible rate.
📌 Need a Performance Bond? Get a Free Quote from JRG Surety Today!
Thank you for your inquiry! We will respond to you shortly!
288 E. Live Oak Ave, Suite A-802, Arcadia, CA 91006, USA
Mon | 06:00 am – 09:00 pm | |
Tue | 06:00 am – 09:00 pm | |
Wed | 06:00 am – 09:00 pm | |
Thu | 06:00 am – 09:00 pm | |
Fri | 06:00 am – 09:00 pm | |
Sat | 07:30 am – 06:00 pm | |
Sun | 10:00 am – 05:00 pm |
Copyright © 2025 JRG Surety and Insurance Agency, Inc. - All Rights Reserved.
Powered by JRG Surety