New Hampshire Construction Bonds

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New Hampshire Construction Bonds

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 New Hampshire Construction Bonds?

New Hampshire construction bonds are surety bonds that protect the state, project owners, and the public against the financial harm that can result from regulatory and contractual violations by contractors operating in New Hampshire. When losses occur as a result of a contractor’s unlawful or unethical actions, the injured party can be compensated for monetary damages.

What New Hampshire Construction Bonds May Be Needed?

Some commonly required construction bonds in New Hampshire are:

  • Bid bonds
  • Performance bonds
  • Payment bonds

Construction bonds may be required by local contractor licensing bodies and by public or private project owners, particularly for larger projects.

Other New Hampshire construction bonds that project owners may require include:

  • Contractor license bonds (local only)
  • Maintenance bonds
  • Subdivision improvement bonds
  • Solar decommissioning bonds
  • Right of Way bonds

How Do New Hampshire Construction Bonds Work?

The three parties to every New Hampshire construction bond are referred to as:

  • The obligee (the party requiring the bond),
  • The principal (the contractor purchasing the bond), and
  • The surety (the party guaranteeing the payment of claims).

The principal is legally obligated to pay valid claims. But the surety honors its guarantee by paying a claim initially as an extension of credit to the principal. The principal must then repay that debt to the surety. If repayment is not forthcoming, the surety can take legal action against the principal to recover the funds.

How Much Do They Cost?

The annual premium cost for a construction bond depends on two factors: the required bond amount established by the obligee and the premium rate set for each contractor by the surety through underwriting. The primary underwriting consideration is the risk to the surety—specifically, the risk of not being repaid for claims paid on the principal’s behalf. This risk is measured largely on the basis of the principal’s creditworthiness.

A high personal credit score is a reliable indicator of low risk to the surety, which should result in a low premium rate. A less creditworthy principal poses a higher risk to the surety, which warrants 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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