Other Contract
Completion Bond
A bond or guarantee that a project will be finished, typically protecting the lender that is financing the project rather than the owner.
- Required by
- Construction lenders, some project owners, and some local governments
- Bond amount
- Set by whoever requires the bond. We confirm it.
What this bond guarantees
A completion bond promises the lender (and sometimes the owner) that the project will be completed and delivered free of liens, so the loan collateral is protected. If the developer or contractor fails, the guarantor or surety must arrange completion or pay. Terms vary much more than standard performance bonds, so the bond form controls.
Who needs it
- Developers and contractors whose construction lender requires a completion guarantee
- Subdivision developers asked by a city to guarantee improvements
- Film and media producers (a separate completion guarantee market)
What the underwriter looks at
- Contractor or developer financial statements
- Project budget and financing
- Experience with similar projects
- Collateral and indemnity
Requirements vary by state and by who asks for the bond. Send us the request you received and we will confirm exactly what it calls for.
Common questions
How is a completion bond different from a performance bond?
A performance bond protects the owner if the contractor defaults. A completion bond protects the lender that the project will be finished, which places more risk on the surety and usually costs more.
Are completion bonds easy to get?
They are harder to place than performance bonds because the surety may be on the hook for financing risks. Expect full financial underwriting.