The Best Surety Bond Companies for 2026
Our top pick for the best overall surety bond company in 2026 is The Hartford, with Travelers being a close runner-up. For more specialized needs, we recommend Jet Surety for small businesses, Liberty Mutual for contractors with bad credit, and Zurich for large-scale operations.
A surety bond is a three-party financial agreement where an insurance company or financial backer guarantees that a business will fulfill its obligations—such as completing a construction contract or meeting licensing standards. If the business fails to deliver, the backer steps in to compensate the client. Surety bonds have many applications in business and are especially important in the construction industry. This guide will break down everything you need to know about surety bonds, with an emphasis on construction. In particular, we will cover what surety bonds are, how they work, the factors that affect their costs, and what to look for in a provider. Finally, this guide will cover some of our favorite surety bond companies, including the three top options below:
| Company | Best For | AM Best Rating | Get Quote |
|---|---|---|---|
The Hartford
|
Best Overall | A+ (Excellent) | |
Jet Surety
|
Best for Small Business | A- (Stable) | |
Travelers
|
Runner-Up | A++ (Superior) |
Table of Contents
Understanding Surety Bonds
Surety bonds are an important tool—and often a requirement—for risk management in many situations. Whether you are a newly licensed business making efforts to comply with the law in your field or a contractor hoping to assure a potential client that you are capable of completing the job, surety bonds can hold you accountable for performing to specific standards. In the process, you also signal to customers, the government, or the public that you are doing so.
Surety bonds accomplish this goal through a tripartite agreement that provides a financial guarantee if you fail to meet your obligations to another person or business. You also put your own skin in the game by paying premiums to the surety and signing an indemnity agreement, which requires you to repay the full cost of any paid claims along with any legal or investigative expenses the surety incurs on your behalf.
Unfortunately, many businesses are unaware of why surety bonds are important until they learn that they need one to operate or enter into a contract. This section of the guide will lay out some critical information for you to know about surety bonds, including what they are, how they work, what types are available, and how they differ from various forms of insurance.
What Are Surety Bonds?
The easiest way to think about surety bonds is as a tool for risk management with some similarities to both insurance and credit. Surety bonds exist to ensure that businesses fulfill their performance and financial obligations in accordance with the law and under the terms of their contractual agreements. Surety bonds accomplish this by involving a third party who will compensate the project owner or other beneficiaries for a business’s failures and recover the full cost of the loss from the business and its owners later.
Imagine that Business A agrees to perform work for Business B. Business B wants a guarantee that the work will be finished as promised, legal standards will be met, and suppliers will be paid. If Business A fails to deliver, Business B wants to be protected from financial loss. To guarantee this, Business A must obtain a surety bond. If Business A fails to meet its obligations, the surety company steps in to compensate Business B up to the bond limit. But because this bond acts as an extension of credit, the surety will then recover all claim costs directly from Business A and its owners.
How Do Surety Bonds Work?
Surety bonds can be somewhat complicated to understand, as many purposes and applications exist across different types of businesses and industries. However, most surety bonds include some similar components and features, regardless of the specific terms or use case. To understand how surety bonds work, it is essential to first know who is involved in a surety bond agreement and then understand the elements of each bond.
Surety bonds are an agreement between three different parties: a principal, an obligee, and a surety.
- Principal: The principal is the individual or business that obtains a bond from a surety to guarantee their ability to fulfill obligations to another party, the obligee.
- Obligee: The obligee is the entity that requires the bond from the principal. Obligees require bonds to minimize their risk and financial loss if a principal cannot meet its obligations. Obligees receive compensation from the surety in the event of a claim against the principal.
- Surety: The surety is the company that underwrites the bond to back the principal financially. If the principal is unable to meet its obligations and the obligee makes a claim, the surety will investigate and, if the claim is valid, resolve the obligation—which may involve paying the obligee, financing the principal to finish the job, or arranging for a replacement contractor to complete the work.
Each bond agreement looks a little bit different, but principals and sureties will usually need to work out a few particular elements or criteria as part of the agreement. These include the bonded amount (the maximum amount the surety will pay out for claims), the principal’s working capital, the bonding capacity, the bond premium, and the bond term.
- Bonding capacity: Bonding capacity is the maximum amount of coverage a principal can obtain from a surety, usually based on the principal’s finances, track record, and reputation. Businesses that sureties determine to be more reliable will likely be able to obtain a higher capacity. Capacity can be set for individual jobs or as an aggregate limit across all of a principal’s projects.
- Working capital: Working capital is a factor that surety companies will evaluate before underwriting a bond, calculated as the difference between a company’s current assets and current liabilities. Because sureties will require reimbursement from a principal in the event of a claim, they want to know what sort of financial cushion a business has to repay its debts.
- Premium: Surety bond premiums are calculated as a percentage of the bond amount. The rate is set based on factors like your or your business’s credit history, the likelihood of loss or other risks, and your business’s financial statements, like your balance sheet.
- Term: The surety bond’s term is the period during which the bond provides active coverage. While some bonds have a fixed expiration date, many are ‘continuous until canceled,’ remaining in effect until the surety or principal provides notice or the obligee releases the bond. Furthermore, the surety’s liability does not necessarily end the moment the term concludes; they may still be held responsible for claims arising from obligations or breaches that occurred while the bond was in force.
Surety Bonds vs. Insurance
Insurance and surety bonds are both common forms of risk management in business, and a company may require both to operate. And they share one important attribute in common: both insurance policies and surety bonds help compensate one party in the event that something goes wrong. The key difference is in the parties involved—and specifically, which parties carry risk in the agreement.
Under an insurance policy, a policyholder pays their insurance provider a regular premium in exchange for the insurer accepting the financial risk to pay for certain losses. For many types of coverage (e.g., under property insurance), an insurer will reimburse the policyholder in the event of a loss. If someone brings a successful claim against the policyholder (e.g., in a liability claim), the insurer will pay out the cost to whoever brought the claim up to the policy’s coverage limits. While the policyholder generally does not contribute beyond their premiums and deductible, they remain personally responsible for any damages or legal fees that exceed their total coverage amount.
Under a surety bond, the legal responsibility for a claim ultimately remains with the individual or business that obtained the bond. The surety bond represents a promise that the principal will fulfill their commitments to the obligee; the surety guarantees that the obligee’s requirements will be met if the principal defaults on their legal or contractual obligations. This may involve the surety providing financial compensation or arranging for the completion of a project. Because the principal must indemnify the surety for any costs incurred, the ultimate financial responsibility for the agreement rests with the principal, though the surety assumes the risk that the principal may be unable to repay them.
Surety Bonds vs. Letters of Credit
Because of the differences between surety bonds and insurance described above, it can also be helpful to think about surety bonds as a form of credit, in which principals pay a premium to a surety to borrow money if needed for compensation to the obligee.
Letters of credit perform a similar function. A letter of credit is an agreement between a customer (the same as a principal), a beneficiary (the same as an obligee), and an issuer, traditionally a bank. Under a letter of credit, the issuer promises to advance compensation for a claim to the obligee, but the bank customer is ultimately responsible for repaying the claim cost.
Letters of credit differ from surety bonds in a couple of important ways that may make them less desirable to the business seeking out the LOC. The first is that a letter of credit often requires collateral or ties up a company’s credit capacity, which can limit the liquid cash available to a business. In contrast, while surety bonds may require collateral for higher-risk applicants, they are typically issued based on credit strength alone, helping to preserve working capital. The second difference is that unlike surety bonds, which require the surety to investigate the validity of a claim before making payment, banks typically must pay on a letter of credit as soon as the beneficiary presents the required documentation, even if the underlying contract dispute remains unresolved.
Types of Surety Bonds
With a firm understanding of what surety bonds are and how they work, it’s time to review the two broad categories that most surety bonds fall into: contract and commercial.
Contract Bonds
Contract bonds are bonds that guarantee that the terms of a contract will be carried out. The terms to be fulfilled may fall in multiple dimensions, such as a business’s obligations to perform the work that they say they will complete or their obligations to pay suppliers or subcontractors for their work on a project. Many obligees—especially government clients—require a contract bond to be filed before a business is allowed to bid on a project or enter a contract. On the front end, this helps hone in on only those businesses that can fulfill the contract terms. During the project, contract bonds minimize the financial risks associated with project failure.
Commercial Bonds
Commercial bonds are usually a legal requirement for a business to be licensed to operate, enacted by a federal, state, or local law. The purpose of these bonds is to protect the obligee (the government entity) and the public: if a business violates regulations or harms a customer, the surety bond will compensate the claimant. As is the case with all surety bonds, the surety will then seek to recover the full cost of the claim and any associated legal fees from the business. Commercial bonds are used across a variety of sectors to ensure that businesses and individuals—ranging from auto dealers and warehouses to alcohol manufacturers and notaries—meet their legal and professional obligations. These bonds ensure that companies follow applicable laws, pay required taxes to the government, and fulfill their duties to their customers.
Court Bonds
A court bond is a specialized type of commercial surety bond required for individuals or entities involved in legal proceedings or those appointed by a judge to a position of trust. Such bonds may be required to reduce the risks of financial loss or to ensure that someone tasked with a specific responsibility by a court of law completes that task. For example, if a court makes a monetary judgment and one party appeals, the court may require a bond to be put in place to ensure that the party who wins the judgment receives payment if the appeal fails. Another example is a bond put in place for a particular individual appointed as a guardian or custodian for minors to ensure that the individual acts in the minor’s best interest. Similarly, a bond might be put in place for the executor of a will to ensure that the executor distributes the estate’s assets appropriately.
Are Surety Bonds Required?
There are thousands of different types of surety bonds. Accordingly, surety bond requirements differ substantially depending on the industry in which a business operates and the federal, state, and local laws to which a business is subject. Additionally, statutory requirements may outline how much coverage a business needs to obtain. To be certain of whether your business is required to have a surety bond—and what type of bond(s) you need if you do—it is best to consult directly with a risk management professional or a surety with expertise in your industry and jurisdictions.
Generally, however, surety bonds are required in the following cases:
- As a requirement of licensure or permitting – If you work in a business where you must meet certain licensing standards to legally operate, the government may require a surety bond, depending on the laws governing your industry in your location. These bonds essentially guarantee that you will follow all of your profession’s laws, rules, and standards. All states have websites listing specific industry bonding requirements, like the CSLB in California.
- When entering into certain government contracts – To protect public resources, many federal, state, or local governments will require some contractors or vendors to have surety bonds. For instance, the federal government requires a surety bond for most construction contracts valued over $150,000. Most state and local governments have similar requirements under ‘Little Miller Acts,’ though their thresholds are typically lower, often requiring bonds for projects valued as low as $25,000 to $100,000.
- Under certain court proceedings – Sometimes, a court bond will be required of one party in a legal case to protect another party from financial loss or to ensure that an individual or entity carries out tasks required of them by the courts.
The common thread in these situations is some involvement of a government actor with an interest in protecting the public or public resources. In most cases with private parties, any requirement for a surety bond will be at the discretion of the entity you contract with.
Understanding Construction Bonds
One of the most common and necessary applications of surety bonds is in the construction industry. Construction projects can be risky, with numerous parties involved and a significant amount of money at stake. Owners want to work with reliable contractors, contractors want to work with reliable subcontractors and suppliers, and everyone wants to receive the payment or completed work they were promised as project milestones are met. The structure of a surety bond helps provide those reassurances to different parties involved in a construction project.
Surety bonds for construction can take several forms depending on the specific context of a project. This section of the guide will explain the different types of construction bonds, how to obtain them, and other important information about surety bonds in the construction industry.
Construction Bonds vs. Insurance
As mentioned in the previous section, surety bonds and insurance are distinct products that both address different forms of risk that may take place in a business transaction. This is true for construction as well, so it is important to recognize how surety bonds and insurance look different in the construction industry.
Insurance policies deal with many risks that may come up on a construction project. Here are a few examples where insurance applies, rather than bonds:
- If you are working on a building and a fire destroys the structure while it is in progress, a builders risk policy will cover the damages.
- If you have a bulldozer stolen from a job site, certain types of inland marine policies will compensate for the loss.
- If an employee is injured on a job site, a workers’ compensation policy will pay out the employee’s claims.
- If you accidentally damage a client’s property that is not part of your current scope of work—such as accidentally hitting a water line that damages a neighbor’s unit—a contractor general liability policy will cover the repair costs and any resulting legal fees.
- If a design-build contractor or construction manager makes a professional error in the project’s design, engineering, or consulting, a contractors’ E&O insurance policy covers the resulting financial damages.
In these examples, an incident could make completing the project as planned more challenging. Still, insurance is a risk-transfer product: the policyholder pays a premium, and the insurer assumes the financial risk of a potential loss. This is a two-party agreement where the insurer expects to pay out claims based on actuary loss experience to shield the policyholder from the financial burden of these losses.
The surety bond arrangement is a three-party risk-mitigation agreement. If a contractor violates the terms of their contract or fails to perform, the surety ensures the obligee’s interests are protected, often by paying the claim or arranging for the completion of the work. However, unlike insurance, the surety bond issuer will ultimately collect the full amount of the loss—including the claim settlement and all associated legal or investigation fees—from the contractor. This means that while both products provide protection, a construction bond specifically guarantees the contractor’s performance to the obligee, who is frequently the project owner but may also be a primary contractor who sets bond requirements for a subcontractor or supplier.
The Most Common Types of Construction Bonds
As is the case in other fields, bonds in construction can serve numerous purposes. The most common types are bid, performance, and payment bonds, which are all various forms of contract bonds. These types are defined below, along with several other types that are used throughout the industry:
- Contractor License Bonds – Contractor license bonds are a form of commercial bond that different types of contractors must purchase to be licensed by a government authority. They represent a promise that contractors will behave ethically and comply with all relevant rules and regulations for their industry in the jurisdiction in which they operate.
- Bid Bonds – Bid bonds are a type of contract bond under which a bidder promises to enter into a contract at the bid price and provide any required performance or payment bonds if they are awarded the project. This prevents contractors from submitting artificially low bids and then attempting to withdraw or renegotiate for a higher price before the contract is finalized.
- Performance Bonds – Performance bonds are another contract bond and one of the most important in construction. Performance bonds are essentially a guarantee that the project will be completed satisfactorily.
- Payment Bonds – Payment bonds are a form of contract bond posted by a contractor to guarantee that suppliers, laborers, subcontractors, and other vendors who work on a project will be compensated. If a party has earned money on a project and the contractor refuses or is unable to pay, they can file a claim against the payment bond to receive what they are owed. This allows subcontractors and suppliers to seek compensation directly from the surety company, providing protection if the general contractor becomes insolvent.
- Maintenance Bonds – Once a project is complete, the owner of a construction project may want additional protection for particular defects or faults that may not become apparent until later. Maintenance bonds guarantee that the contractor will address specific faults and defects for some time after the project is complete.
- Supply Bonds – Supply bonds are a type of contract bond that ensures that suppliers provide the supplies and materials they agree to in a contract for a particular project.
- Subdivision Bonds – For some development projects, a political jurisdiction like a local government may require the developer to guarantee the completion of improvements like sidewalks or electrical systems as a condition of the development of a subdivision.
Surety Bond Requirements for Construction
Surety bonds are often legally required for publicly financed construction projects. Legally speaking, one of the most important requirements a contractor might encounter is the federal Miller Act, which requires general contractors to post performance and payment bonds for federal construction contracts valued at more than $150,000. Additionally, all 50 states have followed suit with “Little Miller Acts” that impose performance and payment bonds for state and local public works projects. These requirements vary by state, so you should be aware of the requirements for the jurisdiction where the project is based. Further, many municipalities require a subdivision bond to guarantee that certain infrastructure improvements are completed as a condition of permitting a development.
When dealing with private owners, bond requirements will be at their discretion. If the owner is more risk-averse or wants to deter contractors who do not have a strong track record from bidding, the owner may impose a bond requirement. However, most owners who require a surety bond understand that contractors will bid on such projects at higher prices to account for the time and money spent to obtain bond coverage.
Finally, prime contractors may also choose to establish bond requirements for suppliers and subcontractors. Contractors have a financial stake in making sure projects succeed, so they may want assurances from others working on the project that work will be completed or materials delivered as promised. Tracking these sub-tier bonds, contracts, and compliance documents is a complex process that is typically handled using dedicated construction project management software.
How to Obtain a Construction Surety Bond
To get started obtaining a surety bond, the first step is to understand the type(s) and amount of bond coverage needed for a project. You should consider any applicable federal or state laws, along with any other specific requirements particular to the project in question. If you are the prime contractor on a public works project, or a large-scale private development, the job will typically involve a bid bond, performance bond, and payment bond.
Next, your business should seek out a licensed surety bond producer who can connect you with sureties that fit your needs. Not every surety is appropriate for every type of business and job. Luckily, it is easier than ever to research providers online, though you will typically need to work with a specialist producer to navigate the formal underwriting and documentation required for contract-specific bonds.
As you move forward, the surety will begin an underwriting process to more fully evaluate the risk associated with covering your business for the project in question. The underwriter will evaluate factors like your firm’s finances, professional experience and capability to carry out jobs, organizational structure and management practices, and your personal character. Based on these factors, the surety will set the bond premiums—charging more for riskier principals or projects and less for those with a high likelihood of success and reliability.
Once you’ve secured your bid bond to submit with your proposal, and later obtained the performance and payment bonds following the contract award, you are ready to file them with the obligee and move forward with the project.
Type of Construction Work That Is/Isn’t Covered
Surety bonds are just one tool for risk management on construction projects, so businesses should understand what protection a surety bond will and will not cover.
In that regard, it’s worth remembering first that surety bonds are not the same as insurance. This is because surety bonds do not necessarily protect the principal’s interests—instead, principals retain financial risk associated with project failures, and surety bonds represent a promise to obligees to complete a job under the conditions promised. In sum, this means that surety bonds for construction will cover financial harm coming from one party not meeting their obligations on a project. This includes situations like a contractor failing to complete a project for a project owner, a contractor failing to pay their subcontractors for work completed, or a supplier not providing the materials they promised.
Surety bonds will not cover every situation like those listed above, however. Sureties may decline to cover certain types of projects that they deem too risky or difficult to underwrite. Some common examples of projects that are more difficult to bond include:
- Overseas projects: Construction projects in other countries have different legal and licensure requirements that require specialized international surety markets.
- Projects on Indian reservations: Because tribal nations are sovereign, sureties often require a limited waiver of sovereign immunity to ensure the bond’s terms can be enforced in court.
- Long-term construction projects: Projects that take many years to complete are subject to higher scrutiny because the extended timeframe increases the uncertainty of the contractor’s future financial stability.
The Pros & Cons of Construction Bonds
Because surety bonds in construction are a three-party agreement, the principal, obligee, and surety each experience distinct benefits and drawbacks. While many of these factors are interconnected, the pros and cons are not a simple mirror image, as certain aspects—like rigorous prequalification—can provide significant advantages to both the contractor and the owner.
The primary beneficiaries include the obligee (typically the project owner) as well as subcontractors and suppliers who are protected by payment bonds. The pros for obligees are that the bonding process weeds out underqualified or risky contractors and that the surety provides a guarantee that the contract will be fulfilled—or that the owner will be compensated up to the bond’s penal sum—if the contractor fails to meet their obligations.
For a contractor, this means that they may be more limited in the types of jobs they can get, and for the jobs they do win, they retain the financial risks of project failure. However, the upside is that compared to other alternatives like letters of credit, construction bonds tie up less of the business’s capital and have friendlier terms for the principal—most notably that the surety can investigate claims more closely to evaluate their merits.
One downside for both owners and contractors is the premiums that must be paid to the surety. Because sureties have a right to indemnity—and can often demand collateral from a contractor as soon as a loss is anticipated—contractors remain financially responsible for their failures, while also paying a premium to the surety to obtain the bond. This is a slight downside for owners as well because contractors often factor in that cost when submitting a bid, though many consider the trade-off worthwhile in light of the benefits.
Surety Bond Costs & Premiums
In many industries, surety bonds are an unavoidable part of doing business. It can be a bit of a headache to seek out the bonds required for a project and pay premiums to secure the necessary guarantee, but doing so is essential for many transactions. But that doesn’t mean that business owners need to break the bank paying for the cost of a bond.
This section of the guide will lay out the typical range of costs for surety bonds along with the factors that affect rates. This information will help you know what to expect as you shop around for surety bonds.
How Much Do Surety Bonds Cost
The cost you pay for surety bonds is typically calculated as a percentage of the total contract price for construction bonds or the overall bond amount for commercial bonds. For most qualified applicants, the percentage rate is set between 1% and 3%, based on the principal’s finances and credit history, the nature of the job, and other factors. However, rates can sometimes be as low as .5% or as high as 20%.
Principals who are considered by the surety to be more likely to fulfill their obligations will pay a lower rate, while those who are seen as less reliable will pay a higher rate. Say two companies each need a bond for a construction project worth $500,000. The first company has a good credit history, strong financial position, and a track record of completing similar jobs to clients’ satisfaction. This company might receive a rate of 1% from the surety, which means they would only pay $5,000 for coverage. The second company has limited working capital and has a reputation for not completing jobs on time and producing lower quality work. This company might receive a rate of 10%, which means they would pay $50,000 for the same bond.
Factors That Affect Surety Bond Rates
Each surety looks at a variety of factors to evaluate the risk level of a bond when setting rates, and no one surety will weigh each factor equally. In general, however, rates are a reflection of the type and amount of the bond, your personal and business credit and finances, your business’s track record, and several other variables. Specific factors that a surety may consider are explained below.
Bond Type
Different types of bonds have different risk levels and obligee expectations, and sureties set rates accordingly. For instance, court bonds like a probate bond or commercial bonds like a notary bond are considered low risk and may have rates of 1% or less. In contrast, something like a contract performance bond for a construction project may be considered riskier, especially if the job requires specialized knowledge or expertise to complete. In such a case, the construction company may need to pay a higher rate to obtain the bond.
Bond Amount
Bond amount could also impact your rates, as sureties want to account for the total financial exposure they assume with each bond. While smaller bonds represent less total risk to the surety, bond pricing typically follows a tiered or sliding scale where the rate percentage decreases as the bond amount increases. All else being equal, a principal may actually pay a lower rate—in terms of percentage—on a $300,000 bond than on a $30,000 bond, as larger obligations often qualify for volume-based pricing discounts.
Credit
When setting rates for a surety bond, the credit history for businesses and certain individuals (usually those with a significant ownership stake in the business) will be one of the most important factors the surety considers. Like with any loan, credit history will be taken as an indication of your willingness, ability, and commitment to paying off any debts. If the surety considers you less likely to repay them if they pay out a claim, you will likely encounter a higher rate on the bond. You can get a copy of your business’s credit report from companies like Experian or D&B.
Financial Statements
Because surety bonds can put a significant amount of money at stake, sureties want to know that principals have the financial wherewithal to pay the bond amount if needed. One of the most important factors the surety will look at is working capital, or the principal’s current assets minus their current (short-term) liabilities. This measure gives the surety a quick indication of the principal’s liquidity and ability to meet short-term financial obligations without having to sell off long-term business assets. Companies in a strong financial position will usually pay lower rates.
Industry Experience
For contract bonds, the surety will be interested in the principal’s capacity to meet the terms of the contract. This may involve looking at the firm’s human and financial resources, technical expertise, and other projects currently underway. But even if a company currently appears capable of completing the work as agreed, one of the best reassurances for sureties is a track record of having successfully completed similar work in the past. Companies without that track record in the industry may be considered riskier and pay more for surety bonds as a result.
Claims History
If clients, subcontractors, or other individuals have filed many claims against you in the past, the surety might take it as a sign that your work is not of high quality or that you are unreliable in meeting your obligations. These attributes would seem to increase the likelihood that more claims will occur in the future. However, the number of claims may be related to the type of bonds you have or the industry you work in, and sureties should consider that context. Regardless, surety companies will evaluate your claims history and will prefer to offer lower rates for those who have avoided claims in the past.
Reputation & Character
Sureties want to deal with trustworthy principals because those businesses or individuals are more likely to act responsibly, meet their obligations, avoid claims, and pay what they owe if there is a claim. And while sureties can get a sense of a business’s trustworthiness from their credit, claims history, or industry experience, they may also look for other, more intangible signs of a business’s reputation and character. Factors like communicating well, having long-tenured management, or paying subcontractors in a timely manner can all indicate that a business is reliable and worthy of paying a lower rate.
Finding the Best Surety Bond Companies
The surety bond market includes small providers, multinational insurers, and everything in between. With the number of companies who provide sureties, the variety of surety bond types available, and the different state regulations around sureties, it can be hard to home in on the best surety bond companies for your industry and location.
Luckily, there are professionals known as surety agents or brokers who understand different types of surety bonds and are familiar with surety bond companies’ offerings and requirements. They can help you find the best options for your needs and give you comparative information across providers. Today, many brokers operate online, which makes it easier than ever to input information and get leads on potential surety bond options, but you can also look for a local broker who may be more familiar with surety bond requirements in your jurisdiction.
Additionally, if you are struggling to secure a contract bond (such as a bid or performance bond), the federal government’s Small Business Administration will help businesses connect with authorized sureties and guarantee bonds for contracts up to $9 million (or $14 million for certain federal projects). While the SBA does not guarantee commercial bonds—like license and permit bonds—this program is highly useful for smaller businesses who, due to their size or limited financial history, may struggle to meet the criteria for traditional contract sureties.
While a surety bond agent or broker will be able to answer many questions for you and connect you with different providers based on your needs, you should do some research independently to know what you are looking for in a surety bond. In the next section we will detail some of the most important factors for you to look out for when comparing companies.
Comparing Surety Bond Companies
Once you have potential surety bond providers in front of you, a few key factors should drive your ultimate selection. These include the bond types and limits available through the surety, the cost of bonds offered, the surety’s reputation and financial strength, and the process for reporting claims. Each of these are explained in more detail below.
Bond Types & Limits
Because there are many different types of surety bonds, and regulations around sureties can vary by state (especially for commercial bonds, which are tied up in states’ different licensing standards), you should check to be sure that a potential provider offers the right type of coverage for your industry in the jurisdiction where you operate.
You should also be aware of how much coverage sureties are willing to offer you. For instance, some smaller surety providers may not offer a limit high enough to cover the value of a major construction contract or could decline to cover a business at a higher dollar amount if they perceive that business to be on the riskier side.
Cost
One of the main factors that business owners will be examining when seeking a surety bond is how much they will end up paying in premiums and rates. Because sureties weigh factors differently when calculating the rate to offer on a bond, you will likely find that some companies may offer more competitive rates than others even with the same bond type and amount. You should look for quotes from multiple providers to make sure that you are obtaining the best possible rates for your needs.
Company Reputation & Financial Strength
When working with any risk management company like an insurer or surety, the company’s reputation and financial strength are important factors to consider. While the cost of a surety claim will ultimately be the principal’s responsibility, having a surety with strong financial resources and a good track record can help reassure obligees that they will be compensated if an issue arises.
The most critical factors to check regarding a surety’s reputation and financial strength are its status on the U.S. Department of the Treasury’s Circular 570 (the “T-List”) and its independent credit ratings. The T-List is essential for contractors because federal law requires a T-Listed surety for government projects; it also establishes each company’s “underwriting limitation,” or the maximum bond amount they are authorized to write. Additionally, rating agencies like AM Best, Moody’s, and Standard and Poor’s evaluate a company’s long-term financial stability, while the Better Business Bureau (BBB) score can offer insight into how the company responds to customer service concerns.
Claims
When an obligee or other party makes a claim against you, the surety you work with will typically evaluate the claim before paying any amount of the bond to make sure that the claim has merit. For you as the principal, this is important because the surety can save you money if they determine that a claim is frivolous or does not have evidence behind it. As you compare sureties, you want to look for companies that are transparent and communicative throughout the claims process and will evaluate claims fairly. Because you are personally responsible for reimbursing the surety for any loss, it is vital to select a provider with a reputation for conducting a diligent investigation that protects you from frivolous or unsubstantiated claims.
Best Surety Bond Companies Overall
The Hartford (Best Overall)
Bond Types & Limits
The Hartford offers a variety of commercial, contract, and other bonds, appropriate for businesses in many different industries or use cases. Its contract bond business includes both construction-specific bond products and other commercial contracts, so its bond offerings can meet a variety of customer needs.
The Hartford is the seventh largest surety provider in the U.S., with ample financial resources behind it. As a result, The Hartford can offer bonding capacity up to $1.5 billion on both commercial and contract bonds. This is ample coverage for almost any business in the market, and while many of The Hartford’s surety products are more oriented toward midsize or larger businesses—especially for construction bonds—customers of any size will find that The Hartford can deliver appropriate amounts of surety coverage for their needs.
Cost
To learn more about the exact cost of The Hartford’s surety bond offerings for your business, you will need to work through a surety bond agent. However, The Hartford’s website allows users to quickly find surety bond agents in their area who partner with The Hartford. Agents can easily generate bond quotes and details through The Hartford’s agent-facing online platform.
Company Reputation & Financial Strength
The Hartford comes out well on measures of company reputation and financial strength. The Better Business Bureau gives The Hartford an A+ rating, not accredited, while its scores from the major credit agencies include an A+ from AM Best and an Aa3 from Moody’s as of 2025. These are all excellent ratings and indicate that The Hartford is a highly reliable surety provider.
Claims
The Hartford’s claims reporting tools make it straightforward to report claims by phone or online. Once a claim has been initiated, The Hartford offers an online claims portal which allows users to track claims progress. To process claims when they occur, The Hartford has a collaborative approach with the bond underwriters, claims professionals, and legal professionals to investigate and resolve claims in a fair manner.
Recommendation
The Hartford’s surety offerings are comprehensive, well-rounded, and appropriate for businesses of many sizes and industries. For these reasons, The Hartford is our choice for the best overall surety bond company.
Jet Insurance Company (Best for Small Business)
Bond Types & Limits
Jet Insurance Company is licensed in all 50 states and Washington, D.C. Jet’s focus is on a wide variety of license, probate, and permit bonds required by states, counties, cities, and courts. Jet prides itself on making surety easily accessible and obtainable for smaller businesses.
Cost
Jet’s direct distribution model means reduced surety costs for the principal. By eliminating brokers and agents, Jet doesn’t have to pay large commissions to middlemen. Additionally, Jet never charges fees on top of the bond’s cost.
License and permit bonds, where the premiums are small, often get overlooked by large insurance companies and grouped into large classes with generic pricing groups. Jet’s research team and underwriters work diligently through most bond requirements to develop a rate structure specific to that bond.
Jet Insurance Company also provides a convenient monthly payment option in addition to traditional annual terms. The monthly option gives contractors the flexibility to pay a low monthly premium and cancel whenever they please.
Company Reputation & Financial Strength
Established in 2018, Jet Insurance Company is fairly new to the surety industry. However, Jet’s team comes with several years of surety experience. With Jet’s experience and early strong showing, AM Best upgraded the company in late 2024 to a Financial Strength Rating of A– (Excellent) and a Long-Term Issuer Credit Rating of a- (Excellent), assessing its balance sheet strength as very strong. Following Jet’s acquisition by Amherst Specialty Insurance Company in December 2025, these ratings were placed under review with developing implications as the company integrates with its new parent organization.
These ratings also take into consideration Jet’s level of risk-adjusted capitalization, measured by Best’s Capital Adequacy Ratio (BCAR), which analyzes the company’s targeted business plan to write nearly all commercial surety bond types with a smaller portion attributed to probate, fidelity, and contract.
Jet Insurance Company’s AM Best rating is likely to continue to evolve with increased written business and a diversified business profile. Following its addition to the U.S. Treasury’s Circular 570 in late 2024, Jet has already expanded its capacity to offer larger contract bonds for its contractor clientele, including those required for federal projects.
Claims
While other insurance companies often only work with the customer in case of a bond claim (utilizing agents for bond sales), Jet works directly with the customer from bond purchase to bond claims and everything in between.
Jet Insurance Company reviews bond claims in-house and is developing a streamlined process to handle even the smallest bond claims. Jet’s management team believes that creating an efficient process for all claim handling can lead to more interaction between the damaged public and contractors, leading to fewer payouts and lower costs for the surety bonds. Claim information and documentation are currently submitted via email to [email protected].
Recommendation
Jet Insurance Company’s platform caters to small and new businesses and can best address a contractor’s required license, registration, and permit bonds. Jet’s focus is on each regulatory requirement to ensure contractors can purchase their surety bond online in minutes and to provide savings on even the smallest of bonding needs. For these reasons, we recommend Jet as the best surety company for small business.
Travelers (Runner-Up; Best for Small Contractors)
Bond Types & Limits
Travelers is one of the major players in the surety market, providing a wide variety of commercial and contract bonds across different industries. Travelers offers some of the highest bonding capacity of any surety in the marketplace, so Travelers can service businesses of any size.
One of Travelers’ main strengths is in construction bonds, especially for smaller contractors. As one of the largest surety companies in the marketplace, Travelers has financial resources to back major public works and construction projects. At the other end of the spectrum, Travelers has a long history in the market for small contractors, with a Construction Services Express program for construction entities doing jobs up to $500,000 in value. Travelers also offers innovative products like subcontractor performance bonds and bonds with dispute resolution procedures included to help ensure that jobs stay on track even when a claim arises.
Cost
Travelers recommends finding an independent surety agent near you to obtain information and quotes about their surety bond offerings. While the company has historically cited a 48-hour turnaround for some quotes, the December 2025 launch of the SuretyBind digital platform—a collaborative initiative Travelers helped develop—is designed to streamline and accelerate bond issuance. This helps mitigate the traditional delay compared to digital-first providers, though Travelers still primarily services customers through its extensive agent network.
Company Reputation & Financial Strength
Travelers’ financial strength ratings remain among the highest of any surety in 2026. AM Best gives Travelers its highest possible rating, A++, while Standard & Poor’s offers a high grade of AA. Travelers is also well-regarded by the Better Business Bureau, which lists the company with an A+ rating. While Travelers has scored below average in recent 2025 and 2026 JD Power satisfaction studies, it remains the top writer in the surety market with a leading market share of approximately 15%.
Claims Reporting
Travelers supports claims reporting 24/7 by email, fax, phone, or standard mail, as well as through the MyTravelers online portal and mobile app. Once a claim has been filed, Travelers has a team of claims professionals to investigate and resolve claims, and excellent digital tools for customers to track the progress of open claims in real-time.
One unique advantage of Travelers is the variety of additional services it offers to surety customers to prevent and resolve claims. For example, Travelers Risk Control provides risk management services and products to help proactively identify potential risks. When challenges do arise, Travelers offers certain types of performance bonds that incorporate dispute resolution services to quickly resolve issues with an obligee or subcontractor. Travelers’ commitment to preventing claims and resolving them quickly is important for keeping jobs on track, instead of delaying them further with time-consuming claim resolution processes.
Recommendation
Travelers offers a well-rounded package for surety bonds without any glaring downsides, which makes it a good choice for many businesses and our pick for overall runner-up. Additionally, Travelers is a good choice for small contractors due to its customized services for emerging contracting businesses.
Liberty Mutual (Best for Bad Credit)
Bond Types & Limits
Because of its resources and extensive reach across the U.S., Liberty Mutual is a solid option for almost any business seeking surety bonds, regardless of their industry, size, or particular bond requirements. Liberty Mutual’s bond types include a variety of commercial, contract, court, and other bonds. In its commercial bond services, Liberty Mutual bonds Fortune 1000 companies and can offer bond limits up to or, in some cases, beyond $750 million; however, Liberty Mutual also serves individuals or small businesses with commercial bonds up to $5 million. For contract bonds, Liberty Mutual offers bonds up to $25 million for smaller or midsize businesses, and some of their options do not even require financial statements.
Cost
As mentioned above, Liberty Mutual offers a variety of bond types for businesses of all sizes, so the specific costs you pay for a surety bond will vary depending on your unique situation and needs. One downside of Liberty Mutual is that you will need to work through a surety agent or broker to access information about rates, but Liberty Mutual does have an easy online platform for agents to quickly calculate quotes.
One noteworthy strength of Liberty Mutual is that it offers both standard surety bonds and alternative models for emerging or struggling businesses through its Vista program. Geared toward businesses with bad credit, these tools may involve using different forms of collateral or managing funds on behalf of the business. Liberty Mutual is additionally a trusted partner for the Small Business Administration’s surety guaranty program. Together, these indicate Liberty Mutual’s willingness and ability to create access to surety bonds even when a business’s financial picture is not ideal.
Company Reputation & Financial Strength
Liberty Mutual is a leader in the surety bond industry both in the U.S. and globally as one of the largest surety bond writers in the market. With such a prominent position in the market, Liberty Mutual has nearly unmatched financial resources, and the major ratings agencies affirm Liberty Mutual’s financial strength with an A2 rating from Moody’s, an A rating from AM Best, and an A rating from Standard & Poor’s, all reaffirmed as recently as 2026. The company currently ranks among the top three insurers for claims satisfaction according to J.D. Power, and it is a dominant force in the industry, writing nearly 20% of the total U.S. surety bond market.
Additionally, Liberty Mutual receives an A- from the Better Business Bureau and has been accredited with the BBB since 1931. This means that Liberty Mutual meets the BBB’s highest standards for honest, ethical business practices.
Claims Reporting
Liberty Mutual makes it fairly easy to initiate a surety claim, accepting claims via an online form, phone, email, or fax. At that point, Liberty Mutual’s claims team, which includes a collection of experienced lawyers, accountants, and risk managers, work to quickly evaluate and resolve surety claims.
Additionally, Liberty Mutual’s claims experts are an in-house team rather than a third party, which is not a universal practice in the surety market. This is an advantage for Liberty Mutual because their underwriters collaborate with the claims teams and other experts to not only respond to claims as they arise but also intervene in disputes to prevent claims from being filed in the first place.
Recommendation
Liberty Mutual offers bond solutions appropriate for all types and sizes of business, a great reputation with top-notch financial strength, and in-house claims support, among other benefits. However, one of Liberty Mutual’s unique strengths is its support for alternative surety bonds. This allows Liberty Mutual to offer the best surety bonds for businesses with bad credit or other financial challenges.
Zurich (Best for Large Contractors)
Bond Types & Limits
Zurich is one of the largest surety bond companies in the market and the longest continuously operating surety provider in the U.S., having gotten started in the U.S. in 1890. Zurich has deep expertise and deep resources which gives it the capability to back surety bonds of almost any type or amount. However, potential customers should know that most of Zurich’s surety business is oriented toward large, highly qualified corporate clients and has particularly strong interest in providing contract bonds for major construction and public works projects. Zurich maintains an AM Best Financial Size Category of XV—the highest possible designation, representing a financial size of $2 billion or more—which provides the immense capital needed to back substantial bond programs. They boast that many of their commercial and contract clients are among the largest in their industries, benefiting from Zurich’s ability to support major, high-limit projects.
Cost
Because Zurich deals with larger, stable, highly qualified businesses, its premium rates are usually relatively low by percentage. As always, specific terms of a surety bond with Zurich will depend on your business’s unique needs.
Compared to its competitors, one nice attribute of Zurich’s surety business is the ease of bond management via its online platform, Surety Express. While large contract bonds require high-level underwriting, Surety Express allows agents and brokers to quickly generate quotes for smaller commercial needs, while providing customers with streamlined tools to view their records and manage payments.
Company Reputation & Financial Strength
Zurich is one of the best-regarded providers in the surety bond market. While Zurich is not a Better Business Bureau-accredited organization, the BBB offers Zurich an A+ grade for its dealings with customers. In terms of financial strength in 2024, Zurich receives ratings of AA from Standard & Poor’s, Aa2 from Moody’s, and A+ (Superior) from AM Best, all of which are among the highest possible ratings on each respective scale. Zurich also performs well in modern customer satisfaction metrics, recently ranking third among commercial lines insurers in the 2024 J.D. Power U.S. Independent Agent Satisfaction Study. As of 2024, Zurich is the third-largest surety writer in the U.S. with a market share of approximately 5.4%.
Claims Reporting
Zurich has a variety of channels available to initiate and manage claims, including online and mobile forms, email, standard mail, toll-free phone, and fax. When a claim is filed, Zurich refers it to members of its in-house claims team to manage the process. When evaluating claims, Zurich distinguishes itself in keeping customers informed, including access to online tools and reports and a proactive approach to communication from its claims team.
Recommendation
While Zurich’s target market may not be a fit for smaller or even many midsize businesses, its long track record of success makes it a great choice for commercial bonds for larger businesses and contract bonds on major construction projects. Zurich is our choice for the best surety bond company for large contractors.
References
- Liberty Mutual. Surety. https://business.libertymutual.com/commercial-solutions/surety/.
- The Hartford. Surety Bonds for Agents. https://www.thehartford.com/commercial-insurance-agents/bonds.
- Travelers. Surety Bonds. https://www.travelers.com/surety-bond.
- Zurich. Surety Bond Coverage. https://www.zurichna.com/insurance/surety.
- Jet Surety. Surety Bonds Simplified. https://jetsurety.com/.
- U.S. Small Business Administration. Surety Bonds. https://www.sba.gov/funding-programs/surety-bonds.
- Moody’s. https://www.moodys.com/.
- AM Best. https://web.ambest.com/home.
- Standard and Poor’s. S&P Global Ratings. https://www.spglobal.com/ratings/en.
- Better Business Bureau. https://www.bbb.org/.
- Wikipedia. Miller Act. https://en.wikipedia.org/wiki/Miller_Act.
- U.S. Government Accountability Office. Small Business Contracting: Surety Bond Waivers for Construction Contracts. https://www.gao.gov/products/gao-17-683r.
- Contractors State License Board. Bond Information. https://www.cslb.ca.gov/contractors/maintain_license/bond_information/.
- International Trade Administration. https://www.trade.gov/.