Two of the most important kind of surety bonds for any construction project are bid bonds and performance bonds. While both can be important, there are some major differences in the bid bond vs performance bond question. If you want success in your next contract, you need to know the differences.

There are key differences that are essential for planning your next contract effectively. Find out which is best suited for your project in our comprehensive bid bond vs performance bond comparison and discover how NSSI can help with all your surety bond needs.


The primary difference between bid bonds and performance bonds is what they cover. Bid bonds are used to help select which contractor will get the project while performance bonds are used to ensure the project is completed correctly. That means you don’t have to choose which one to get as a contract would require you to make use of both.

When you bid on a contract, there are plenty of other contractors also submitting bids. With an accompanying bid bond, clients can be sure that you’re prepared to abide by your bid because if you don’t, you could be in legal trouble thanks to your bid bond. Meanwhile, a performance bond is only necessary after you’ve gotten the contract, and it ensures you do the project correctly.


Due to the nature of each bond, you won’t always need both. If you want your bid to be taken seriously, you need to submit a bid bond alongside it in order to appear trustworthy. This is necessary every time you compete to get a contract for your company. Without a bid bond, your chances of being chosen are virtually nil.

Performance bonds, on the other hand, are only necessary after you’ve won the bid. Think of bid bonds as your way to get your foot in the door while performance bonds are for the actual work. You only need to purchase a performance bond to protect the client and any subcontractors from costs covering an incomplete project. Without that kind of protection, a client may revoke your bid win.


While these bonds may seem like nothing more than a burden for construction companies, there are actually benefits offered by each that you can actively take advantage of. Utilizing bid bonds protects you as much as it does your clients since unprofessional construction companies can’t waltz into negotiations with impossibly low prices. Bid bonds force companies to live up to their promises which can set you apart from less serious candidates.

The benefits of performance bonds are a bit different. While they put responsibility directly on the contractor’s shoulders, it increases the likelihood of subcontractors wanting to work for you. When they don’t have the burden of a great financial risk, they’ll be happy to take the job and help. Performance bonds protect subcontractors just as much as they protect the client hiring the contractor.

Get Bid Bonds and Performance Bonds with NSSI

If you’re looking for bid bonds and performance bonds at the most competitive prices in the industry, look no further than National Surety Services Inc. We take a service and results approach to surety bonds that has lead to a streak of successes lasting 25 years. Contact us today to take advantage of both sides of the bid bond vs performance bond question.