Washington Construction Bonds

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Washington construction bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

What Is a Washington Construction Bond?

All Washington construction bonds serve the same basic purpose. They provide protection for project owners and the public against the negative financial impact of regulatory or contractual violations by contractors. The contractor (referred to as the bond’s “principal”) is legally obligated to pay valid claims for monetary damages incurred by the project owner (known as the bond’s “obligee”) or other injured party.

What Types of Washington Construction Bonds May Be Needed?

Washington requires all contractors operating in the state to be registered and bonded. Registration requires the purchase of a contractor license bond.

Washington’s “Little Miller Act” requires performance bonds and payment bonds from contractors working on state-funded construction projects valued in excess of $35,000. And bid bonds may be required in competitive bidding situations. Some local jurisdictions and private project owners may be subject to bid, performance, and payment bond requirements. Washington contractors may also have to purchase other construction bonds, which could include:

  • Maintenance bonds
  • Subdivision/site improvement bonds
  • Supply bonds
  • Solar decommissioning bonds
  • Right of Way bonds
  • Contractor license bonds

How Does a Washington Construction Bond Work?

The third party to a Washington construction bond is the “surety,” the bond’s guarantor. Although the principal is legally obligated to pay valid claims, the surety guarantees that they will be paid. In fact, the surety will extend credit for the purpose of paying claims, if that becomes necessary. 

The usual practice is for the surety to pay the claimant, drawing on a line of credit established for the principal when the bond was purchased. This extension of credit creates a debt that the principal must repay in accordance with the surety’s credit terms. Not repaying the surety can result in a lawsuit to recover the debt.

How Much Does It Cost?

The premium for a Washington construction bond is the product of multiplying two factors—the bond amount and the premium rate. The premium rate is set by the surety based on the risk of the principal not repaying the surety. This risk is best measured by the principal’s personal credit score.

A creditworthy individual is unlikely to pose much of a risk, so a high credit score deserves a low premium rate. Conversely, a less creditworthy principal will be assigned a higher premium rate because of the higher risk level.

The premium rate for a principal with good credit usually is in the range of 1% to 3%. 

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Washington construction bonds. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

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FREE CONSTRUCTION BOND QUOTE

What Is a Washington Construction Bond?

All Washington construction bonds serve the same basic purpose. They provide protection for project owners and the public against the negative financial impact of regulatory or contractual violations by contractors. The contractor (referred to as the bond’s “principal”) is legally obligated to pay valid claims for monetary damages incurred by the project owner (known as the bond’s “obligee”) or other injured party.

Washington requires all contractors operating in the state to be registered and bonded. Registration requires the purchase of a contractor license bond.

Washington’s “Little Miller Act” requires performance bonds and payment bonds from contractors working on state-funded construction projects valued in excess of $35,000. And bid bonds may be required in competitive bidding situations. Some local jurisdictions and private project owners may be subject to bid, performance, and payment bond requirements. Washington contractors may also have to purchase other construction bonds, which could include:

  • Maintenance bonds
  • Subdivision/site improvement bonds
  • Supply bonds
  • Solar decommissioning bonds
  • Right of Way bonds
  • Contractor license bonds

The third party to a Washington construction bond is the “surety,” the bond’s guarantor. Although the principal is legally obligated to pay valid claims, the surety guarantees that they will be paid. In fact, the surety will extend credit for the purpose of paying claims, if that becomes necessary. 

The usual practice is for the surety to pay the claimant, drawing on a line of credit established for the principal when the bond was purchased. This extension of credit creates a debt that the principal must repay in accordance with the surety’s credit terms. Not repaying the surety can result in a lawsuit to recover the debt.

The premium for a Washington construction bond is the product of multiplying two factors—the bond amount and the premium rate. The premium rate is set by the surety based on the risk of the principal not repaying the surety. This risk is best measured by the principal’s personal credit score.

A creditworthy individual is unlikely to pose much of a risk, so a high credit score deserves a low premium rate. Conversely, a less creditworthy principal will be assigned a higher premium rate because of the higher risk level.

The premium rate for a principal with good credit usually is in the range of 1% to 3%.

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Request a quote online or call today to speak with one of our surety bond experts about obtaining a Washington construction bond.