Performance and payment bonds guarantee that contractors will complete construction projects according to contract terms and pay all subcontractors, suppliers, and laborers. These bonds are required on Illinois public works projects over $150,000 and are commonly required on larger private projects as well.
Overview
What it is.
Performance and payment bonds guarantee that contractors will complete construction projects according to contract terms and pay all subcontractors, suppliers, and laborers. These bonds are required on Illinois public works projects over $150,000 and are commonly required on larger private projects as well.
Who usually needs it
General contractors bidding on or awarded Illinois public works contracts over $150,000 must obtain both performance and payment bonds. Contractors on large private construction projects may also need these bonds if required by the project owner. Subcontractors may need bonds for high-value subcontracts ($250,000+).
Pricing & timing
What to expect.
Generic pricing
Performance bonds guarantee that a contractor will complete a project according to the contract terms. Typical Pricing:. • Small contracts: Commonly around 1–5% of the contract value (one-time upfront premium). • Larger contracts: Rates generally scale lower as contract size increases. • Credit impact: Good credit: starting around 1–2% · Average credit: typically 2–4% · Credit challenges: often 4–5% or higher. • Full underwriting required: Credit, financials, experience, and bon…
Typical timeframe
Full underwriting required — typically 3–5 business days
Application
What to do next.
Tell us the bond name, state, and amount on your form.
Share business and applicant info so the team can quote it.
Sign and pay; we issue the bond and send you the documents.
Keep your effective date and renewal date on file with us.
Start the application.
You are on the exact bond page. The next step is to start the quick application.
StateILBond amountVaries by license type or projectObligeePublic and Private Project OwnersBond classPerformance BondCategoryConstructionBondIllinois Performance & Payment BondsPlain descriptionPerformance and payment bonds guarantee that contractors will complete construction projects according to contract terms and pay all subcontractors, suppliers, and laborers. These bonds are required on Illinois public w…Who needs this bondGeneral contractors bidding on or awarded Illinois public works contracts over $150,000 must obtain both performance and payment bonds. Contractors on large private construction projects may also need these bonds if req…
FAQ
Common questions.
What is the threshold for requiring performance and payment bonds on Illinois public works projects?
As of January 1, 2024, performance and payment bonds are required on Illinois public works projects that exceed $150,000. This threshold increased from the previous $50,000 requirement under the Public Construction Bond Act (30 ILCS 550). Local government units (counties, townships, municipalities, school districts, and library districts) may require bonds for projects of $150,000 or lower if they adopt a resolution or ordinance establishing that requirement. Both bonds must equal 100% of the contract amount.
Who can file a claim against an Illinois payment bond?
Subcontractors, material suppliers, and laborers who have not been paid for work performed or materials supplied on an Illinois public works project can file a claim against the payment bond. Claims must be filed within 180 days of the last date work was performed or materials were delivered. The payment bond protects these parties from non-payment and prevents mechanic's liens from being placed on public property. The surety company will investigate the claim and pay legitimate amounts, then seek reimbursement from the bonded contractor.
What underwriting documents are required to obtain Illinois performance and payment bonds?
To obtain performance and payment bonds in Illinois, contractors must provide comprehensive financial documentation including: business and personal tax returns (typically 3 years), current financial statements (balance sheet and income statement), bank statements (3-12 months), work-in-progress schedule showing current projects, company resume with experience history, personal financial statements from owners/principals, credit authorization forms, and the project contract documents. Surety companies review this information to assess the contractor's financial strength, creditworthiness, bonding capacity, and ability to complete the project. Approval time ranges from 24 hours for simple bonds to several days for complex projects.
