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Contractor Bond Premium Calculator

Bonds backstop contractor performance.

$
%

Total bond cost

$330,000

Performance portion

$165,000

Payment portion

$165,000

How the math works

Bond cost = contract × rate (covers both performance and payment).

$22M × 1.5% = $330k total. $165k performance, $165k payment.

How to Use

  1. Enter contract value.
  2. Enter bond rate %.
  3. Enter performance + payment multiplier.
  4. Read total bond cost.

Frequently Asked Questions

Bond types?

Performance bond: 100% of contract, guarantees work completion. Payment bond: 100% of contract, guarantees sub/material payment. Typically required 50/50 split of premium. Bid bonds: 5-10% at bid. Maintenance bond: 10% post-completion.

Typical rates?

Top-rated GC: 0.5-1% of contract. Mid-tier: 1-2%. Financial strain or small GC: 2-4%. Large projects (>$50M): 0.8-1.5% typical. Graduated scale: lower rate above $5M contract.

Alternatives?

SDI for subs (see SDI calc). Letters of credit (5-10% of contract). Cash deposits/escrow. Personal guarantees. Bond replacement programs for specific projects. Each has different cost and coverage profile.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.

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