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Non-Construction Performance Bond

What is a non-construction performance bond?

Non-construction performance (NCP) bonds are surety bonds that guarantee contracts unrelated to a building or construction job. Usually provided by a bank or insurance company, they are issued to one party of a contract as a guarantee against the failure of the other party to meet the obligations specified in the contract. Examples of non-construction performance bonds include janitorial services and landscape maintenance.

How much does a non-construction performance surety bond cost?

The cost of a non-construction performance bond is usually a small percentage of the bond’s total, depending on the applicant's credit and history with bonding.

Why do I need a non-construction performance bond?

A contractor is asked to provide a non-construction performance bond to ensure the contractor will provide the services or supplies as written in the contract. Non-construction performance bonds give financial protection to the obligee. As with any surety bond, if there is a default that results in a loss by the surety company, the surety will expect the principal to repay any money paid out in case of a claim. Surety bonds are not insurance.

What are the types of non-construction performance bonds?

There are a few types of non-construction performance bonds, and here are the most common:

  • Service Contract Bonds – Service contract bonds relate to a service being provided. These may include security, landscape, window washing, pest control, waste hauling, food service, street sweeping, etc.
  • Supply Bonds — Supply bonds guarantee the delivery of material, equipment, or other supplies as the contract outlines. These types can include office/school supplies, flooring, fencing, work trailers, computer equipment, irrigation equipment, generators, software, and wireless installations, among others.
  • Maintenance Bonds — Maintenance bonds are set for a specific period and ensure the property owner or landowner will be compensated for any issues with workmanship, materials, and design after a completed construction project.

How can I get a non-construction performance bond?

Non-construction performance bonds may be purchased from any reliable surety company. You must complete the appropriate application and submit it with a copy of the contract, a request for proposal (RFP), or bid specs. Most surety companies will also ask for business and personal financial statements if the bond is for more than $75,000.

What else should I know about non-construction performance bonds?

Non-construction performance bonds are not renewed but are tied to a contract, so they remain in effect for the duration of the contract. If there are any cost overruns, the surety will bill the principal for any additional amount required.

The Simple Bonding Process

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Sign your contract and pay the premium
Seal the deal and ensure protection and peace of mind for your business.
Receive your surety or fidelity bond
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