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A construction bond is a 3 party agreement in which the bonding company (surety) guarantees that a contractor will perform obligations according to the established plans and specifications of a contract.

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Are you an emerging contractor looking for your first performance bond facility? Have you experienced difficulty or frustration qualifying for a traditional surety or have been deterred due to the high complexity or the vast amount of paperwork? 

The Emerging Contractors' Construction Bond Program offers a quick and easy qualification process and provides the flexibility to graduate into a Standard Facility, issuing performance bonds greater than $300,000. 

The program's construction bonds are underwritten by a Canadian licensed and federally approved insurance/surety companies, on industry standard CCDC forms. The program facilitates bids bonds, 50% or 100% performance bonds, 50% or 100% labour & material bonds, maintenance bonds, consents of surety, agreements to bond and all other standard and non-standard requirements.


Construction Bonding FAQ – Emerging Contractors


Q- What type of Contractor is accepted into the program?
A- Contractors of all types


Q- What types of bonded contracts are unwritten in the program?
A- All types of contracts are considered


Q- What about Asbestos, Environmental, recycling, waste removal and High-tech?
A- Yes, all types of contracts are considered


Q- What if I require a larger construction bond than $300,000
A- The program is flexible and can accommodate all bond limit requirements, O.A.C.


Q- What is the cost for a bid bond?
A- Bid Bonds, Agreements to Bond and Pre-qualification Letters are included with your surety facility at no extra charge


Q- What is the cost for the surety facility?
A- An annual fee is determined on a case by case basis and is dependent on credit profile and scope of work


Q- What are the cost of construction bonds and labour material bond?
A- One-Two Percent and a half per cent of the overall cost of the job, depending on your business profile and type of bond(s) required


Q- Does the Emerging Contractors Construction Bond Program cover the warranty period?
A- Yes, the standard is a one-year warranty/maintenance period, and we can offer two years or more, on a case by case basis


Q- What if I participate in a specialized field and do jobs across the country?
A- The Emerging Contractor Program can facilitate


Q- What if my projects are mainly subcontracted?
A- No problem


What Are Construction Bonds?

Construction bonds are a legal agreement in which the surety guarantees that a contractor or principal will perform the obligations according to the established plans and specifications of the contract. Construction bonds provide security to the obligee that, should the contractor fail to perform their obligation under the contract, the surety will assume the responsibilities of the contract as per the terms of the contract and subject to the conditions on the bond. The surety may:


  1. Complete the contract involving the original contractor by providing any required financial, management or technical support.
  2. Re-tender to a new low bid and pay for the cost of completion in excess of the contract price.
  3. Pay the bond penalty.

When a contractor is a successful bidder on a tender, a construction bond is often required to be submitted along with various documents prior to starting work. Construction bonds are most often requested on public projects but can be requested by private owners as well. Construction bonds are available for general contractors, sub-contractors along with many niche industries including suppliers, manufacturers and engineering companies.


Qualifying For Construction Bonds


To determine whether or not a contractor qualifies for construction bonds, the surety will look to the 3 “C´s” of credit.


  1. Character:  Does the contractor have a good track record, good references and integrity?
  2. Capacity:  Does the contractor have sufficient cash flow to service the job and to weather potential delays in payment?  Is a line of credit in place, in case of emergency?
  3. Capital:  Does the contractor have the net worth position and working capital necessary to complete the project and support the various other projects they are undertaking?

 Ai Surety Bonding has programs available for construction bonds of all sizes. Whether you are a large experienced contractor or an emerging contractor, we can secure the bonding facility that is right for you.


 Applying For Performance Bonds? Have Questions?

Contact our surety experts at 1-877-213-4545 or

We provide Construction Bonds all throughout Canada including Ontario, Alberta, British Columbia, and Manitoba. 

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