Surety
What Is Bid Bond?
A bid bond is a surety bond that guarantees you will honour your bid and enter into the contract if you win. It protects the project owner if a contractor backs out after being awarded the job, and is commonly required to bid on public and larger private construction projects.
If a winning bidder backs out, the bid bond pays the owner the difference between that bid and the next-lowest qualified bid, up to the bond amount. A bid bond is usually the first step toward performance and labour & material payment bonds on the same project.
Questions about Bid Bond?
Our Ontario brokers can explain how it applies to your policy.
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Reviewed by Roughley Insurance Brokers Ltd. — licensed Ontario insurance brokers since 1945. Last updated May 30, 2026. ← Back to the glossary