Site Improvement-bond

A site improvement bond guarantees that a property owner, developer or contractor will complete the public improvements a city or county requires as a condition of a permit or development approval. These often include sidewalks, curbs, streets, storm drains, street lights, utilities and landscaping. If the work isn't finished on time or to the agency's standards, the agency can make a claim against the bond to pay for completing it.

How a site improvement bond works

The bond is an agreement among three parties: you, the owner, developer or contractor (principal); the agency that requires the bond (obligee); and the surety that issues it. For example, if a city requires new sidewalks around your site and they are left unfinished, the city can make a claim and use the bond to have another contractor complete them, up to the bond amount. If the surety pays a claim, you must repay the surety.

Site improvement vs. subdivision bond

Both guarantee public improvements tied to development. Subdivision bonds are usually required when a new subdivision plat is approved, while site improvement bonds are usually tied to a permit or site plan for an individual property. Agencies use different names for similar bonds, including completion, plat and improvement bonds, so use the bond form and amount your agency specifies.

Bond amount and your premium

The agency sets the bond amount, usually based on an engineer's cost estimate for the required improvements. Many agencies require 100% of the estimated cost, and some require more, such as 110% to 150%, to cover rising costs. That amount is the coverage required, not the price you pay. Your premium depends on the surety's underwriting, including your credit, financial statements, experience and the size of the project. Request a quote rather than relying on a fixed rate.

How to apply

Apply as soon as the agency gives you the bond amount and form, since the bond is often required before a permit is issued or a plan is approved. Start the online application with your business information, the project details and the bond amount required. WWIS will review your submission and help you with the quote, required documents and issuance. Approval and timing depend on the surety and a complete application.

Information needed to apply

When the bond is released

The bond stays in force until the agency inspects and accepts the completed improvements. Some agencies reduce the bond amount as work is installed. When the bond is released, many agencies require a maintenance bond to guarantee the finished work against defects for a set period, often one or two years.

Get help with your application

Call 888-518-8011 or email [email protected] for help selecting the bond and completing your application.