Bid bonds usually cost around $100 per contract.
Keep in mind that the cost of the bid is not the amount of the bid bond. The amount of the bid bond is the amount of coverage that the surety is ready to extend to the obligee. In other words, if a successful claim is made against your bid bond, the surety will cover costs only up to the full amount of the bid bond.
The full amount of a bid bond is determined in relation to the amount of the contract. A bid bond’s full amount usually does not exceed 5-10% of the total amount of the contract.
For example, if the contract you are bidding on is $200,000, the amount of your bid bond will be between $10,000-$20,000. In case of a claim against your bond, the surety will offer backing up $20,000, if that is the final amount of your bond.
Unlike the other contract bonds, bid bonds don’t cost much because of the detailed and extensive check that sureties perform on contractors prior to issuing the bond. When performing this check, personal credit score is among the most important factors that sureties take into account.