Signing a construction contract and bond

Surety Bonds for Ontario Contractors

Bonding capacity decides which projects you can bid. We connect Ontario contractors with licensed brokers who have surety markets and can help you get bonded, grow your limits and meet public contract requirements.

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Service & Support:

Follow-up from a licensed broker within 24 hours
Policy Review and Comparison
Risk Assessment
Help with certificates of insurance, policy changes and contract reviews
Renewal planning well before your policy expires

Quick answer

What are surety bonds for contractors in Ontario?

Construction surety bonds guarantee that a contractor will perform the work (performance bond), pay its subcontractors and suppliers (labour and material payment bond) or honour its tender price (bid bond). Under Ontario's Construction Act, public contracts of $500,000 or more require a performance bond and a labour and material payment bond, each for at least 50% of the contract price.

How construction bonds work

A surety bond is a three party guarantee between the contractor, the project owner and a surety company. If the contractor fails to perform or pay, the surety steps in, then looks to the contractor to repay it. That is why bonding is underwritten much like credit.

For Ontario public contracts of $500,000 or more, the Construction Act requires a labour and material payment bond and a performance bond, each covering at least 50% of the contract price, in the prescribed forms. Many private owners and lenders also ask for bonds on larger projects.

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We are not an insurer or a broker. We find you the right one.

Matched by industry
We connect you with a broker who works with businesses like yours, not a generic call centre.
Licensed Ontario brokers
Insurance brokers in Ontario are licensed by the Registered Insurance Brokers of Ontario (RIBO).
Fast follow up
Once we receive your information, a professional in our network will connect with you within 24 hours.
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Our referral service is free for businesses. You deal directly with the broker for quotes and coverage.

Common construction bonds

These are the bonds Ontario contractors are asked for most.

Bid bond

Submitted with a tender
Guarantees you will sign at your bid price
Often 10% of the bid

Performance bond

Guarantees completion of the contract
At least 50% on Ontario public contracts over $500,000
Form 32 on public work

Labour and material payment bond

Protects subs and suppliers if you do not pay
At least 50% on Ontario public contracts over $500,000
Form 31 on public work

Maintenance bond

Covers warranty period defects
Sometimes required after completion
Shorter term

Licence and permit bonds

Required by some municipalities
Road cut and right of way permits
Small, fixed amounts

Lien bonds

Used to vacate a construction lien
Keeps funds flowing on a project
Arranged through a surety

How to get bonded and grow your capacity

What sureties look at

Sureties underwrite character, capacity and capital: your experience, the size and type of work you have completed, and your financial statements, ideally prepared by an accountant who knows construction.

Year end financial statements and work in progress schedules
Completed project history
Bank line and working capital

Start before you need it

Bonding takes time to set up. Talk to a surety broker months before your first bonded tender so your limits are in place when the right project comes up.

Set a single job and aggregate limit
Share your pipeline
Keep the surety updated as you grow

Bid bigger public and private work

Tell us about your construction company and the work you want to bid, and we will connect you with a licensed Ontario broker with surety markets who can set up or grow your bonding program.

Surety Bond FAQs

Are bonds mandatory on Ontario public construction projects?

Yes. Under the Construction Act, public contracts with a price of $500,000 or more require a performance bond and a labour and material payment bond, each for at least 50% of the contract price, in the prescribed forms.

Is a surety bond the same as insurance?

No. Insurance protects you. A bond protects the owner, subcontractors and suppliers, and the surety expects the contractor to repay any claim it pays.

How much does a surety bond cost?

Bond premiums are usually a percentage of the bonded amount and depend on your financial strength and experience. A surety broker can quote once they review your financials.

Can a small contractor get bonded?

Yes. Smaller contractors can often start with modest limits based on their financial statements and experience, then grow them over time.

What happens after you request commercial insurance?

1
Discovery Call
(30 to 45 min)
Understand operations, contracts, assets, and loss history.

We will request your
expiring policies and loss runs.
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2
Risk Mapping
(1 to 3 days)
Document exposures, limits, sublimits, deductibles, and endorsements that fit your contracts.
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3
Market Placement
(2 to 5 days)
Approach the right markets
and negotiate terms, exclusions, and deductibles.
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4
Proposal & Bind

Side-by-side options in clear wording, so you can choose with confidence.
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