Surety Bonding FAQ

South Coast Surety's Frequently Asked Bond Questions.

We are working to repopulate this section after our recent website redesign, so if you don’t find answers to your questions please contact our team of surety experts at 800-361-1720 or

We’re here to help you get bonded at the best rates available!


What is Surety?

Surety is the act of a person or corporation making themselves liable for another’s debts, defaults or obligations, etc…

What does Bondable mean?

Bondable means that the Contractor’s capital, character & capacity have been analyzed by a Surety Underwriter. The Surety Underwriter has then determined that the Contractor can perform certain types of work within established parameters. Based upon that determination, the Surety Company will issue Surety Bonds guaranteeing the Contractors performance and/or payments within the resolved guidelines.

Can any Contractor get Bonded?

No. The purpose of requiring Surety Bonding is to have the Surety Company thoroughly analyze the capabilities and capacity of the Contractor to verify their ability to complete the project in the desired manner. Since the Surety Company is not in the contracting business and therefore has no desire to end up with having to complete the guaranteed work, they are very particular about the Contractors they bond.

Does that mean that the new Contractors and those that have had some problems are excluded from Bonding?

Again no. As previously discussed, there are a variety of Surety Companies and Surety Programs available. Many include special arrangements or SBA backing for Emerging Contractors or those with explainable prior difficulties. There are a number of entry level and small contractor programs now available.

This is where your agent becomes most important. The experienced Surety Agent can usually find some Surety support for any worthy contractor.

What does it take to get setup with a Surety Company?

Ideally, the Surety Company wants to see three years of Reviewed, CPA prepared business financial statements along with Work in Progress Schedules, Accounts Payable and Accounts Receivable Schedules, Company & Contractor Histories, Bank References and thoroughly completed questionnaire (often, surety support is established with less). The Surety Agent’s job is to retrieve this information from the contractor, verify its completeness, evaluate the provided information and submit it to the Surety Company that will best match up with the contractor’s needs and capabilities.

What determines the size of the jobs a Contractor can bond?

The Surety Companies use various underwriting guidelines to ascertain what Surety limits are applicable. Financial strength, prior job history, time in business and type of work are some of the components. The Surety Agent usually works with the Contractor to present the most favorable illustration for the Surety Company to review.

Bid Bonds

What is a Bid Bond?

A Bid Bond is issued by the Surety to the owner of the project in lieu of a required cash deposit. The cash deposit (usually 10% of the bid amount) is subject to full or partial forfeiture if the contractor is the low bidder and fails to either execute the contract or provide the required Performance and/or Payment Bonds.

When is a Bid Bond Required?

Nearly all Public Sector jobs and many private ones require the posting of a bid bond or cashiers check at the time the bid is submitted.

What does a Bid Bond Cost?

The Surety Company normally charges an annual Bid Bond Service Undertaking Fee ranging from $150-$300. This fee covers the charges for any and all bid bonds provided within that time period.

Performance / Payment Bonds

What is a Performance/Payment Bond?

A Performance Bond is a non-cancelable commitment issued by the surety to the owner of the project (obligee) guaranteeing that the Contractor will complete the referenced contract within its set terms and conditions. A Payment Bond guarantees that all sub contractors, labormen and material suppliers will be paid leaving the project lien free.

When is a Performance/Payment Bond Required?

Performance/Payment Bonds (Final Bonds) are usually required on all Public Sector jobs and many Private ones. Whoever initially requires bid bonds customarily need to be issued final bonds within 30 days of the award date or prior to any contract payment.

What does a Performance/Payment Bond cost?

The premium rate for Performance/Payment Bonds varies upon the contract price, type of work, strength of the Contractor and the Surety Company. The rate can range from less than 1% to over 4% of the total contract price. The Payment Bond is added at no additional charge. A Payment Only Bond is rarely requested and is billed usually at about 50% of the regular premium.

What Our Customers Have to Say

I have processed 2 defective title bonds through South Coast Surety and I am the type that gets worried for any little detail and want to make sure everything is done correctly the first time to prevent double work for myself and everybody. Knowing how I am both times I had to call customer service and they answered every little question I had in a very nice and gratifying way that made me feel I would not have any problems in which I did not. South Coast Surety has the ultimate best customer service.

5 Star Review

Gaby - CA
May 2019

Quotation Mark

I was shopping for a surety bond for the first time and having trouble communicating with several different companies. When I contacted South Coast Surety they responded quickly and performed the transaction quick and easy. I might have been able to find a lower price, but their professionalism was worth a couple extra dollars.

5 Star Review

KG C. - CA
April 2019

Quotation Mark

We are opening up a Mental Health Residential Treatment Center and needed a Surety bond since we will be handling some clients cash resources. I reached out to South Coast Surety, they sent me an application, paid our premium and had our bond sent to us immediately. Everyone I spoke to and emailed was courteous, attentive and responded very quickly. We will most definitely continue to get all of our bond services from South Coast.

5 Star Review

John F. - CA
September 2021

Quotation Mark

Great customer service from South Coast Surety. When I had questions about the bond and process, their customer service team assisted me with a sense of urgency and answered my questions. I recommend using their services. I will be a returning customer.

5 Star Review

P&C B. - CA
April 2021

Quotation Mark

I needed a surety bond and was referred by another company to south coast. I am very impressed with the level of customer service in every stage of issuing the bond, the rapid response to the get the bond issued and communication with the team. Great team and awesome service. I highly recommend South Coast Surety for you bond needs.

5 Star Review

Mirwais A. - CA
March 2021

Quotation Mark

I was in need of obtaining my CA Insurance Bond. I was able to obtain my required Bond quote online within minutes. I approved the quote and requested the Bond to be issued. On the same day, I received the Evidence of Coverage. Could not ask for better pricing or better service. I highly recommend South Coast Surety to meet a wide range of Bonding needs.

5 Star Review

Udo G. - NJ
January 2018

Quotation Mark

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