Performance & Payment Bonds
Issued nationwide by Machaen Insurance Agency, backed by A-rated, Treasury-listed sureties.
Overview
Performance and payment bonds are issued together once a contract is awarded and form the core guarantee behind nearly every bonded construction project. A performance bond guarantees the contractor will complete the project according to the contract's terms, on time and to specification; if the contractor defaults, the surety is responsible for arranging completion or compensating the owner up to the bond amount, usually equal to 100% of the contract value. A payment bond guarantees that subcontractors, laborers, and material suppliers will be paid for their work, protecting the supply chain from non-payment.
Who Needs This Bond
- Contractors who have been awarded a public project subject to the Miller Act or a state 'Little Miller Act'
- Contractors on private projects where the owner or lender requires bonding as a condition of the contract or financing
- General contractors managing subcontractors and material suppliers who need payment protection
How Much Does It Cost?
Premiums typically range from 0.5% to 3% of the contract value depending on the contractor's financial strength, work-in-progress schedule, and experience with similar projects. Larger or higher-risk contracts may require a higher rate or additional underwriting.
How to Get Bonded
Apply
Complete a short application with your business and coverage details.
Get Quoted
We shop the market among A-rated carriers for the most competitive terms.
Get Covered
Sign your agreement and receive your bond or policy, often within a few business days.
Stay Compliant
We track renewal dates so your coverage stays active without a lapse.
Frequently Asked Questions
Why are these two bonds usually issued together?+
Because they address the two central risks of any contract: that the work won't get done (performance) and that the people who did the work won't get paid (payment). Sureties underwrite them as a single package tied to the same contract.
What happens if I default on a bonded contract?+
The surety will investigate the claim and, if valid, either arrange for a replacement contractor to complete the work or compensate the owner up to the bond amount. The contractor remains responsible for reimbursing the surety under the indemnity agreement signed at bonding.
How does this affect my bonding capacity for future jobs?+
Active bonded contracts count against your aggregate bonding capacity until they are completed and closed out, which is why keeping an accurate work-in-progress schedule matters for winning your next bid.
Get a Quote for This Bond
Speak with our surety team about your Performance & Payment Bonds requirements.
201-316-4159
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