Maintenance Bonds

A maintenance bond guarantees that a contractor or developer will repair defects in materials or workmanship that appear during a set period after a project is completed and accepted. If you don't make the repairs, the project owner can make a claim against the bond to cover the cost. Cities and counties commonly require maintenance bonds on streets, utilities and other public improvements, often before they accept the work or release your performance bond.

How a maintenance bond works

The bond is an agreement among three parties: you, the contractor or developer (principal); the project owner or agency that requires the bond (obligee); and the surety that issues it. If defects caused by your construction show up during the maintenance period and you don't fix them, the owner may make the repairs and claim the cost against the bond, up to the bond amount. If the surety pays a claim, you must repay the surety.

Maintenance bond vs. performance bond

A performance bond guarantees that you complete the project as agreed. A maintenance bond picks up after completion and guarantees the finished work holds up for a set period. Some agencies require a separate maintenance bond when the work is accepted, while others let a performance bond include the maintenance period. Check your contract or permit to see which applies.

Bond amount and your premium

The contract, permit or local code sets the bond amount, usually as a percentage of the construction cost. Requirements vary widely: some cities ask for 10% or 20%, while others require 100% of the cost of the improvements. That amount is the coverage required, not the price you pay. Your premium depends on the surety's underwriting, including your credit, financial statements and experience. Request a quote rather than relying on a fixed rate.

How to apply

Apply before the project nears completion, since many owners won't accept the work or release your performance bond until the maintenance bond is filed. Start the online application with your business information, the project details and the bond amount and period required. WWIS will review your submission and help you with the quote, required documents and issuance. Approval and timing depend on the surety and a complete application.

Information needed to apply

When the bond is due and released

Maintenance bonds are usually due when the project is finished, before the owner accepts the work. The maintenance period then runs from the acceptance date, often for one or two years. At the end of the period, the owner typically inspects the work. If no defects remain, the bond is released. If you are still finishing a project, you may also need a performance bond in the meantime.

Get help with your application

Call 888-518-8011 or email [email protected] for help selecting the bond and completing your application.