A Performance Bond (Construction) guarantees that a contractor will complete a construction project according to the contract terms, plans, and specifications. If the contractor fails to complete the work or defaults, the surety company steps in to ensure the project is finished, protecting the project owner from fina…
Overview
What it is.
A Performance Bond (Construction) guarantees that a contractor will complete a construction project according to the contract terms, plans, and specifications. If the contractor fails to complete the work or defaults, the surety company steps in to ensure the project is finished, protecting the project owner from fina…
Who usually needs it
General contractors, specialty contractors, and construction firms awarded public works contracts in Ohio (especially state ODOT projects and certain local government projects), as well as contractors working on large private construction projects where the owner requires performance security. Required for contractors bidding on or awarded Ohio Department o…
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.
StateOHBond amountVaries by license type or projectObligeePublic and private project ownersBond classPerformance BondCategoryConstructionBondPerformance Bond (Construction)Plain descriptionA Performance Bond (Construction) guarantees that a contractor will complete a construction project according to the contract terms, plans, and specifications. If the contractor fails to complete the work or defaults, t…Who needs this bondGeneral contractors, specialty contractors, and construction firms awarded public works contracts in Ohio (especially state ODOT projects and certain local government projects), as well as contractors working on large p…
FAQ
Common questions.
When is a Performance Bond required for construction projects in Ohio?
In Ohio, a Performance Bond is required for all state public works contracts under Ohio Revised Code §153.54, and for Ohio Department of Transportation (ODOT) highway and infrastructure contracts under ORC §5525.16. The bond is mandatory at 100% of the contract amount before entering into the contract. Private construction project owners may also require performance bonds as a condition of the contract, especially on large commercial projects. Local governments may have their own bonding thresholds and requirements.
What happens if a contractor defaults on an Ohio construction project with a Performance Bond?
If a contractor defaults, the project owner (obligee) must provide written notice to both the contractor and the surety company, attempt resolution, and then formally declare the contractor in default. The surety investigates the claim and has several options: finance the original contractor to complete the work, hire a replacement contractor, take over the project directly, or deny the claim if valid defenses exist. The surety pays up to the bond's penal sum (typically 100% of the contract amount) to cover completion costs, then seeks reimbursement from the contractor through the indemnity agreement.
What are the underwriting requirements for an Ohio construction Performance Bond?
To obtain an Ohio Performance Bond, contractors must undergo full underwriting review including: personal and business credit checks, comprehensive financial statement review (showing liquidity and financial strength), work-in-progress schedule, bonding history, resume of experience and qualifications, and bank statements. The surety must be authorized by the Ohio Superintendent of Insurance and approved by the ODOT director or public authority for financial sufficiency. Contractors need to demonstrate adequate capacity to handle the project size and provide a Certificate of Insurance for general liability and workers' compensation coverage.
