Why Contractors Need Performance Bonds to Win Big Jobs

June 30, 2025      

In today’s competitive construction industry, winning big contracts requires more than just competitive bids and skilled workmanship. For contractors aiming to land large-scale projects—especially public works or high-value private developments—performance bonds have become an essential part of the equation.

At TriState Business Insurance, we often see contractors underestimate the power of performance bonds. Here’s why securing one can be a game changer for your business.

What Is a Performance Bond?

A performance bond is a type of surety bond issued by an insurance company or bank to guarantee that a contractor will complete a project according to the contract terms. It protects project owners (obligees) by ensuring that if the contractor (principal) fails to perform, the surety will cover the costs to complete the work or compensate the owner.

Boost Your Credibility and Trustworthiness

For large projects, owners want assurance their contractor can deliver. A performance bond acts as a seal of approval, proving that your company has been vetted and approved by a reputable surety. This builds confidence in your reliability and financial stability, setting you apart from competitors.

Meet Government and Industry Requirements

Many public sector projects require performance bonds by law. For example, federal contracts often fall under the Miller Act, mandating performance bonds for contracts over $150,000. Without a bond, contractors are simply ineligible to bid, cutting off access to lucrative government work.

Protect Your Business and Your Clients

Performance bonds aren’t just beneficial for project owners—they also protect contractors by providing a clear framework for dispute resolution and risk management. When you carry a performance bond, you show your commitment to project completion and quality, which can open doors to partnerships and repeat business.

How to Get Started with Performance Bonds

Obtaining a performance bond involves underwriting by a surety company, which assesses your financial health, work history, and project specifics. At TriState Business Insurance, we guide contractors through the bonding process, helping you understand requirements and securing the best terms for your business.

Ready to Win Bigger Jobs?

If you want to compete for higher-value projects and grow your contracting business, performance bonds are a must-have. Contact TriState Business Insurance today to learn how we can help you get bonded and position your company for success.

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