How Bond Rate Tables Are Structured
Every number on this page is illustrative. These tables show a realistic structure so you can understand the mechanics of bond pricing and sanity-check a quote. They are not a rate quote and they are not any particular surety's schedule. Your actual rates are set by your surety, based on your financial strength, your experience and the type of work. Ask your producer for your rate sheet.
This page is the single source of truth for the rate data used across this site. The bond premium calculator is built from these values. If you change a number here, change it there.
1. The structure
Surety bond premium is charged on a sliding scale in bands. The contract amount is split across bands, each band carries its own rate per $1,000 of contract value, and the rate decreases as the contract gets larger. It is a progressive tax bracket run in reverse.
Every surety uses this structure. What varies between them is the band boundaries, the rates in each band, and the number of tiers.
The band boundaries used throughout this site:
| Band | Range |
|---|---|
| 1 | First $100,000 |
| 2 | Next $400,000 (to $500,000) |
| 3 | Next $2,000,000 (to $2,500,000) |
| 4 | Next $2,500,000 (to $5,000,000) |
| 5 | Next $2,500,000 (to $7,500,000) |
| 6 | Everything above $7,500,000 |
2. Base rates by tier
Sureties typically maintain three rating tiers. Names vary — A1 / A / B, Preferred / Standard / Merit, Class I / II / III — but the structure is consistent: one cheapest tier for the strongest accounts, one middle, one for accounts carrying more risk.
Rates below are dollars per $1,000 of contract value.
| Band | Best tier | Standard tier | Merit tier |
|---|---|---|---|
| First $100,000 | $9.00 | $10.00 | $12.00 |
| Next $400,000 | $9.00 | $10.00 | $12.00 |
| Next $2,000,000 | $7.50 | $9.00 | $11.00 |
| Next $2,500,000 | $6.00 | $8.00 | $10.00 |
| Next $2,500,000 | $5.50 | $7.00 | $8.50 |
| Remaining | $5.00 | $6.00 | $7.00 |
Effective rates these produce
| Contract | Best tier | Standard tier | Merit tier |
|---|---|---|---|
| $250,000 | $2,250 (0.90%) | $2,500 (1.00%) | $3,000 (1.20%) |
| $500,000 | $4,500 (0.90%) | $5,000 (1.00%) | $6,000 (1.20%) |
| $1,000,000 | $8,250 (0.83%) | $9,500 (0.95%) | $11,500 (1.15%) |
| $2,000,000 | $15,750 (0.79%) | $18,500 (0.93%) | $22,500 (1.13%) |
| $5,000,000 | $34,500 (0.69%) | $43,000 (0.86%) | $53,000 (1.06%) |
| $10,000,000 | $60,750 (0.61%) | $75,500 (0.76%) | $91,750 (0.92%) |
| $25,000,000 | $135,750 (0.54%) | $165,500 (0.66%) | $196,750 (0.79%) |
Two things to take from this table:
- The effective rate falls as the contract grows. The commonly quoted "1% to 3% of contract" is only roughly true at the small end and badly wrong at the large end.
- Your tier is worth real money. The gap between the best and merit tiers on a $10M job is $31,000, for identical work. That gap is the concrete, dollar-denominated answer to why your working capital ratio matters.
Your rating tier can vary by type of work within your own company. A contractor may hold the best tier on their core self-performed scope, a middle tier on scopes they subcontract heavily, and the merit tier on maintenance or service work. Ask your producer whether you have one tier or several, and which scopes are priced worst.
3. Maintenance / warranty rates
Maintenance bonds are rated on their own, much cheaper scale, because the exposure is smaller — fixing a defect is a far easier promise than completing a building.
These rates are commonly the same across all three tiers:
| Band | Rate per $1,000 |
|---|---|
| First $100,000 | $2.00 |
| Next $400,000 | $2.00 |
| Next $2,000,000 | $1.75 |
| Next $2,500,000 | $1.50 |
| Next $2,500,000 | $1.50 |
| Remaining | $1.25 |
If maintenance rates are identical across your tiers, confirm that is intentional rather than an artefact of an old rate sheet. Some sureties do differentiate.
The 12-month rule: a maintenance or warranty period of 12 months or less is normally included in the performance bond premium at no extra charge. Beyond 12 months, it is priced separately — either on the scale above or as a percentage surcharge.
4. Surcharges
Contract duration
| Duration | Surcharge |
|---|---|
| Up to 24 months | None |
| 24 to 36 months | +25% of base premium |
| 36 to 48 months | +50% of base premium |
| Over 48 months | Negotiated case by case |
Applied to the base premium, not to the contract amount. This distinction matters — a 25% surcharge on premium is a few thousand dollars; 25% of the contract amount would be absurd, and calculators that get this wrong produce wildly wrong answers.
The trigger is contract duration, not construction duration. Procurement lead time, phased occupancy and commissioning periods all count.
Warranty / maintenance period
| Warranty period | Treatment |
|---|---|
| 12 months or less | Included in base premium |
| Over 12 months | Rated on the maintenance scale above, or a percentage surcharge |
Design-build
Two approaches are common:
Flat surcharge: approximately +50% of base premium. Simple, and what smaller contractors usually see.
Separate sliding scale: applied to the contract value in bands, which scales better on large contracts and is what larger contractors usually see:
| Band | Best tier | Standard tier | Merit tier |
|---|---|---|---|
| First $500,000 | $4.50 | $5.00 | $6.00 |
| Next $2,000,000 | $3.00 | $4.00 | $5.00 |
| Remaining | $2.50 | $3.00 | $3.50 |
"Design assist," "delegated design," and performance-specification scopes can trigger design-build treatment even when the contract is not labelled design-build. If your scope includes engineering a component to a performance spec, tell your producer before you bid.
5. Broker commission
Your producer earns a percentage of the premium, and — like the rate — that percentage steps down by band:
| Band | Commission |
|---|---|
| First $100,000 | 30% |
| Next $400,000 | 30% |
| Next $2,000,000 | 27.5% |
| Next $2,500,000 | 25% |
| Next $2,500,000 | 20% |
| Remaining | 7% |
On a $2,000,000 contract at the standard tier, that is roughly $5,213 of commission out of $18,500 of premium.
Two implications:
- Your producer is meaningfully compensated, and it is reasonable to expect real service in return — annual meetings, rate reviews, capacity advocacy, fast turnaround, and help preparing your submission.
- The steep drop on the top band means producers earn very little on the largest contracts, which is why very large accounts are frequently negotiated on a fee basis instead.
6. What else moves the price
Rates are not the whole story. These change the number without changing the table:
| Factor | Effect |
|---|---|
| Minimum premium | Often $250–$500. Small bonds are priced at the minimum regardless of the table. |
| Bid bonds | Normally issued at no charge. |
| Consent of surety to final payment | Normally at no charge. |
| Prequalification letters | Normally at no charge. |
| Bond riders on change orders | Priced as additional premium on the increase. |
| Dual obligee riders | Sometimes carry additional premium. |
| Joint ventures | Priced case by case; both parties are usually underwritten. |
| Subdivision / site improvement bonds | Different scale, often with collateral. |
| Small-contractor / SBA-backed programs | Different pricing altogether — often a flat rate with lighter paperwork. |
7. Final premium
Premium is owed on the final contract amount, not the original. At closeout the same table, tier and surcharges are applied to the final amount, and the difference is billed or refunded.
Sureties bill additional premium reliably. Return premium is less reliably volunteered — ask for it. See bond closeout and final premium.
8. Using these tables
Do not use them as a price. Use them to:
- Estimate bond cost at bid time when you do not yet have a quote
- Check a quote for sanity — if a quoted premium is 40% off what this structure produces, ask why
- Understand what a change in tier, duration or scope actually costs
- Reconcile the surety's execution report against what you expected
And use the four questions from what construction bonds actually cost:
- What rate tier am I in, and why that one?
- What is the band structure?
- What surcharges are included in this number?
- Is the maintenance period rated separately or included?
Try it: Bond Premium Calculator — every table on this page, applied automatically, with a full band-by-band breakdown and an editable rate table.