Mississippi Construction Bonds

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Surety Bond Professionals is a family owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your construction bond needs.


What Are Mississippi Construction Bonds?

Mississippi construction bonds are surety bonds that provide financial protection for the state, project owners, and the public by requiring contractors working in Mississippi to operate lawfully and ethically. In the event of regulatory or contractual violations that result in monetary losses, the injured party can file a claim for damages.

What Mississippi Construction Bonds May Be Needed?

Some commonly required construction bonds in Mississippi are:

There is no state-level licensing requirement, but local contractor licensing bodies may require contractor license bonds.

Other Mississippi construction bonds that project owners may require include:

  • Maintenance bonds
  • Subdivision improvement bonds
  • Solar decommissioning bonds
  • Right of Way bonds

How Do Mississippi Construction Bonds Work?

Every Mississippi construction bond is legally binding on the three parties to the surety bond agreement. These are:

  • the obligee—the party requiring the bond,
  • the principal—the contractor purchasing the bond, and
  • the surety—the bond’s guarantor

The legal obligation to pay claims the surety deems valid belongs entirely to the principal. However, the surety has guaranteed the payment of claims by agreeing to extend credit to the principal to cover the claim amount. The common practice is for the surety to pay the claimant directly, creating a debt the principal must repay or risk being sued by the surety to recover the debt.

How Much Do They Cost?

The annual premium cost for a construction bond is a small percentage of the required bond amount, that percentage being the premium rate. While the obligee establishes the bond amount, the surety sets the premium rate through underwriting.

The underwriters determine the risk of the surety not being repaid for claims paid on the principal’s behalf. The primary measure of risk is the principal’s personal credit score. A high credit score means the risk to the surety is low, so the premium rate also will be low. A lower credit score is a sign of higher risk, which demands a higher premium rate.

A well-qualified principal typically will be assigned a premium rate in the range of .5% to 3%.

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