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Performance Bonds in Montana: A Contractor’s Guide

What is a Performance Bond?

A performance bond is a type of surety bond used in construction projects. It guarantees that a contractor will complete the job according to the contract. If the contractor fails, the surety company ensures the work gets finished.

Performance bonds often come with a payment bond, which guarantees that subcontractors and suppliers get paid. Together, these contract bonds protect project owners and build trust in your business.


When Do Contractors in Montana Need Performance Bonds?

Contractors may need a performance bond in Montana when:

  • Public projects: The Montana Little Miller Act requires performance and payment bonds for public construction jobs over $50,000.

  • Federal projects: Under the Miller Act, performance bonds are required for federal contracts over $150,000.

  • Private projects: Owners and lenders often require bonds for large commercial or private builds.

👉 If you are bidding on schools, municipal utilities, road projects, or other government work in Montana, you will almost always need a bond.


How to Qualify for a Performance Bond in Montana

Getting bonded is a lot like applying for business financing. The surety company looks at whether you can complete the project and manage your obligations.

They review:

  1. Credit history – both personal and business.

  2. Financial strength – balance sheet, income, and cash flow.

  3. Experience – successful completion of similar projects.

  4. Capacity – your resources to handle the job plus your current backlog.


What Documents Do You Need for a Performance Bond?

Contractors applying for a performance bond in Montana usually need:

  • Completed contractor application.

  • Personal financial statement.

  • Business financial statements (CPA-prepared for larger jobs).

  • Work in progress (WIP) project schedule.

  • Bank reference letter.

  • Resume and project history.

  • Copy of the contract or bid specs.

At Montana Insurance Brokers, we guide you through this process and present your business in the best light to bonding companies.


How Much Does a Performance Bond Cost in Montana?

Performance bond premiums vary based on project size and contractor strength:

  • Typical rates: 0.5% to 3% of the contract amount.

  • Example: A $1,000,000 project may cost $10,000 for the bond.

  • Premium is paid once at the start of the project.


How Long Does It Take to Get Approved?

  • First-time applicants: Usually 1–2 weeks after submitting paperwork.

  • Established contractors: Once approved, new bonds can often be issued in 24–48 hours.


Frequently Asked Questions (FAQ’S)

Do I need a performance bond for every project?
Not every project. Only when required by law or the project owner.

Can I get a bond with bad credit?
Yes, smaller bonds are possible, but costs may be higher and paperwork stricter.

Is a performance bond the same as insurance?
No. Insurance covers losses. A surety bond is a guarantee — if the surety pays out, the contractor must repay them.

Can new contractors in Montana get bonded?
Yes. Strong personal credit and financials make approval easier, especially for smaller jobs.


Why Work With Montana Insurance Brokers?

  • We specialize in performance bonds, payment bonds, and contract surety bonds in Montana.

  • We partner with trusted surety companies like CNA Surety, Travelers, and Liberty Mutual.

  • We help contractors get set up for a bonding line, so you’re ready for any project.

  • We’re based in Whitefish, Montana, serving contractors statewide.

Get Your First Performance Bond in Montana

At Montana Insurance Brokers, we help local contractors qualify for the bonds they need to bid bigger jobs and grow their business.

Call us at 406 401 7220 and we’ll walk you through the bonding process step-by-step.

-Klinton Jones
Principal Insurance Broker