Santa Clara County Contractor Surety Bonds
Contractor Surety Bonds for Santa Clara County
Surety bonds are vital in expanding a contractor’s ability to take on public—and sometimes private—projects in Santa Clara County. With a larger bonding capacity, contractors unlock new opportunities and boost their credibility. A strong surety backing proves that a contractor has the financial strength and expertise to complete projects.
However, navigating bonding requirements can feel overwhelming, especially for new contractors. CSBA is here to offer expertise and personalized guidance throughout the bidding process.
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Types of Contractor Surety Bonds in Santa Clara County
In Santa Clara County, surety bonds are a legal requirement for most public and private construction projects.
Surety bonds, from bid bonds to performance and payment (P&P) bonds, help Santa Clara County ensure they award their contracts to responsible and qualified contractors.
Bid Bonds
A bid bond is a type of surety bond required when bidding on public construction contracts. It acts as a financial security for the obligee, ensuring that the contractor will enter into a formal agreement if awarded the project. It also ensures that the contractor will provide the necessary performance bond and payment bond as required by the contract.
Unlike other alternative securities, bid bonds serve as a prequalification tool, as the surety has already underwritten the contractor. By supporting the contractor’s bid bond, the surety is saying it believes the contractor can successfully complete the project.
Performance Bonds
A performance bond is a type of contractor surety bond that guarantees the contractor will complete the project per the contract's terms and conditions. It is issued at the time the contract is awarded, and is typically for 100% of the contract amount although that can vary based on the obligee’s requirements.
Payment Bonds
A payment bond is a type of contractor surety bond that guarantees payment to subcontractors, laborers, and material suppliers. Required on public construction projects in Santa Clara County and across California, it’s typically issued alongside a performance bond to provide financial assurance.
As public property cannot be liened, payment bonds are a way to protect first, second, and potentially third-tier subcontractors and suppliers. It also reduces the risk of mechanics’ liens or legal action against owners of private projects.
Santa Clara County Surety Bond Requirements
Under Santa Clara County’s Standard Specifications (Section 2.08), public project bids exceeding $30,000 must include a bid guarantee. This rule applies to all contractors bidding on county-funded construction projects.
If you choose to submit a bid bond as your bid guarantee, it must meet the following conditions:
- Issued by a state-authorized surety.
- Must not be less than 10% of the total contract amount, including all additives and/or all alternate bid items. However, contractors should check the specifications for the particular project they are bidding to confirm the requirements.
- Made payable to the County of Santa Clara.
*Verify any requirements with the federal, state, or local agency directly and read our disclaimer.
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Cost of Contractor Surety Bonds in Santa Clara County
In California, bid bonds typically incur no upfront cost, as they primarily serve as a prequalification tool for serious bidders. However, it’s essential to account for the premium rates of your payment and performance bonds in your total bid to ensure your the cost is covered if you are low and awarded the contract. Factors that affect your bond premium rate are the following:
Bond Amount
The premium rate often tiers down as the contract gets larger.
Contractor Credit & Financial Strength
Strong credit scores and solid financials help with more favorable bond rates.
Type of Financial Statements Submitted
CPA-prepared financial statements are more likely to secure better pricing than internally prepared records.
Past Project Performance
A track record of successfully completed and profitable projects can lead to improved rates.
Volume of Bonded Work
Contractors who perform a lot of bonded work and have an ongoing, active relationship with their surety, providing frequent updates and an open line of communication, often qualify for lower premiums.
How to Apply for Contractor Surety Bonds with a State-Authorized Surety Company
As one of the largest surety-only agencies in California, we have specialized in contractor surety bonds since 1984. With a team of agents and underwriters, our combined 225+ years of experience developed a proven streamlined bond application process and fast turnaround for contractors like you, so you can focus on completing projects in San Francisco.
Choose a Qualified Surety Agent
Partner with an experienced surety agent who understands Santa Clara County’s bond requirements and can help you navigate these requirements.
Complete the Bond Application
Your surety agent will guide you through the application process, which typically requires details such as:
- Project scope, timeline, and contract value
- Financial and credit information (the size of the job will dictate how in-depth the financial underwriting will be)
- Previous project experience and bonding history
Get Bonded and Begin Work
Once your application is approved, your surety bond will be issued. You’re now ready to submit your bid or move forward with your contract with confidence.
Why Contractors Trust CSBA for Santa Clara County Contractor Surety Bonds
Discover the CSBA difference—the trusted choice for surety bonds on projects across Santa Clara County.
Specialized Surety Expertise
Unlike general insurance agencies, CSBA is a surety-only agency. That means 100% of our focus is on bonding contractors.
Proven Industry Experience
Since 1984, we’ve built a strong track record of issuing performance and payment bonds for public works projects throughout California.
We Know Surety—and Contractors
Trusted by over 300 construction companies—from local startups to national firms—we help you pursue bonded projects that align with your capabilities and company goals.
Streamlined Process, Personalized Support
Our in-house underwriters ensure fast, responsive service and a smooth approval process from start to finish.
Local Insight, Statewide Reach
Headquartered in California with a dedicated office in Novato, we offer a deep understanding of regional bonding requirements, including those unique to Santa Clara County.
FAQs
How Long are Bid Bonds Good for?
The project owner determines the validity period of a bid bond. Some owners specify the required duration in the bid documents, while others may not mention it at all. Typically, bid bonds are valid for 90 to 120 days after the bid submission. However, if the contract award process is delayed, project owners may request an extension of the bid bond to maintain the validity of their offer.
How Long are Performance Bonds Good for?
Performance bonds remain in effect until the bonded project is completed per contract terms. The bond ensures that the contractor fulfills all performance obligations throughout the project’s duration and any applicable warranty periods.
What happens if the contractor fails to provide P&P bonds?
If the contractor who was awarded the project fails to enter into the contract and/or fails to provide the performance and payment bonds, then the obligee can make a claim on the bid bond from the surety. Typically, the claim is for either the difference between the amount of the contractor’s bid to the next lowest bid, or the full penal sum of the bid bond, whichever is less.
How Long are Payment Bonds Good for?
Payment bonds remain in effect until the project is completed and the statutory claims period has passed. This ensures that all subcontractors, suppliers, and laborers have had adequate time to file any payment claims under the bond.
Are surety bonds paid monthly?
No, surety bonds are not paid monthly. They are typically paid in full at the time the bond is issued. The premium is based on the total contract value, so if the contract amount increases or decreases, an adjustment will be made at the end of the contract.
Get a Free Consultation from CSBA
Contractors choose CSBA for our competitive rates, quick turnaround times, and personalized support—all designed to help you increase your bonding capacity and grow your business.
Ready to take the next step with a trusted surety partner?
Request a free bond quote today and experience the CSBA difference.
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