Florida Performance Bonds: Guaranteeing Project Completion with Confidence

In construction, every contract is a promise: to show up, to perform, to deliver. For Florida contractors, that promise must be backed by more than just a handshake. That’s where performance bonds come in.

Performance bonds in Florida are essential tools that provide project owners with peace of mind that a job will be completed according to contract terms, even if the contractor defaults. For public work, they’re a legal requirement. For private jobs, they’re a competitive advantage.

Whether you’re a seasoned GC bidding FDOT projects or a commercial builder scaling up, understanding performance bonds—and how to secure them efficiently—is a critical part of staying competitive. In this post, we’ll explain what performance bonds are, why they matter, how they differ from other types of surety bonds, and how Florida Risk Partners can help you issue them 24/7 through our quote/bind/issue platform.

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What Is a Performance Bond?

A performance bond is a type of surety bond that guarantees a contractor will fulfill the obligations of a construction contract. If the contractor fails to complete the project, the surety steps in to ensure the project gets finished—either by paying damages, hiring another contractor, or completing the work themselves.

As with all surety bonds, a performance bond is a three-party agreement between:

• Principal – The contractor responsible for completing the work
• Obligee – The project owner (public agency or private client)
• Surety – The company that guarantees the contractor’s performance

Performance bonds are often paired with payment bonds, which protect subcontractors and suppliers. Together, they provide comprehensive protection for all parties involved in a construction project.

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When Are Performance Bonds Required in Florida?

In Florida, performance bonds are required by law on most public construction projects valued at $100,000 or more, under the Florida Little Miller Act (F.S. 255.05). The purpose is to safeguard taxpayer-funded projects from delays, incomplete work, and financial losses due to contractor failure.

Some common examples of performance bond requirements include:

• Florida Department of Transportation (FDOT) projects
• School construction in counties like Orange, Hillsborough, and Miami-Dade
• Municipal buildings, utilities, and infrastructure
• County-led renovations and vertical construction

For private construction projects, performance bonds may not be required by law but are often included in the contract—especially for large-scale or investor-funded builds.

In either case, being able to provide a performance bond is a signal that your company is credible, financially sound, and capable of delivering quality work.

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Why Are Performance Bonds Important?

There are several reasons why performance bonds matter in the Florida construction landscape:

1. They Build Trust with Project Owners

When a public or private entity hires a contractor, they’re investing millions of dollars and trusting that the job will be done right. A performance bond reduces the risk that the contractor will walk away or underdeliver.

2. They’re Legally Required

For public jobs over $100,000 in Florida, performance bonds aren’t optional. Failing to provide one can lead to contract cancellation or disqualification.

3. They Reduce Project Delays

If a bonded contractor defaults, the surety can step in quickly to replace the contractor or fund the remaining work—avoiding costly schedule disruptions.

4. They Protect Your Business Reputation

Having a performance bond in place signals to clients and subs that you’re reliable and professional. It also opens the door to bigger, more lucrative jobs that less established contractors may not qualify for.

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What Does a Performance Bond Cover?

A Florida performance bond covers:

• Failure to complete work according to the contract
• Substandard work that doesn’t meet specifications
• Delays or project abandonment
• Non-compliance with contract terms

It does not cover:

• Breach of warranty
• Cost overruns due to change orders
• General project disputes unrelated to performance

If a claim is filed against the bond, the surety will investigate the situation and, if the claim is valid, will pay to correct the issue—up to the bond amount. That could mean paying another contractor, compensating the owner, or completing the job directly.

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How Is the Bond Amount Determined?

In Florida, the required performance bond amount is typically 100% of the total contract value. So, if you’re awarded a $3 million contract, the performance bond must also be in the amount of $3 million.

This ensures that the project owner is fully protected, even if the original contractor defaults midway through the job.

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The Difference Between Performance, Bid, and Payment Bonds

Here’s how performance bonds fit into the broader bonding process:

Bond Type	Purpose	When It’s Required
Bid Bond	Guarantees that the contractor will sign the contract if awarded	At the bidding stage
Performance Bond	Guarantees that the contractor will complete the project	After contract is awarded
Payment Bond	Guarantees that subcontractors and suppliers will be paid	After contract is awarded

Together, these three bond types form the backbone of Florida’s construction bonding system.

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What Happens If a Contractor Defaults?

If a bonded contractor fails to meet their obligations, the project owner may file a claim against the performance bond. From there, the surety company has a few options:

1. Finance the Existing Contractor – Provide additional resources to help them finish the job.
2. Hire a New Contractor – Pay for another qualified contractor to take over.
3. Pay Damages – Compensate the project owner for losses incurred due to non-performance.

Keep in mind that the contractor is ultimately liable for reimbursing the surety for any costs paid on their behalf. Unlike insurance, a performance bond is a form of credit, not risk transfer.

That’s why proper underwriting and prequalification are so important.

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How to Get a Performance Bond in Florida

Securing a performance bond starts with building a strong relationship with a surety agent—like Florida Risk Partners. Here’s the step-by-step process:

Step 1: Complete a Contractor Questionnaire

This includes details on your:

• Company structure
• Past project history
• Key personnel
• Bonding history

Step 2: Submit Financial Documents

Sureties will evaluate your:

• Business financials (balance sheet, income statement)
• Personal financials of owners
• Bank line of credit and cash flow

Step 3: Get Approved for a Bond Line

If your submission is approved, you’ll be issued a bonding capacity—both single-project and aggregate. This sets the maximum size and number of projects you can bond at once.

Step 4: Issue the Bond via Our 24/7 Platform

Once approved, Florida Risk Partners allows you to quote, bind, and issue performance bonds online anytime—day or night. No waiting on a manual process or chasing paperwork before a bid deadline.

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Why Florida Risk Partners Is the Best Choice for Florida Contractors

At Florida Risk Partners, we understand that bonding isn’t just a requirement—it’s a strategic advantage. That’s why we’ve built a streamlined bonding process designed around the needs of Florida’s construction professionals.

Here’s what sets us apart:

• 24/7 online bonding platform – Issue bonds on your time, not ours.
• Local expertise – We know Florida laws, public agency requirements, and how bonding fits into your workflow.
• Fast approvals – For prequalified clients, we can issue bonds in minutes.
• Hands-on support – Get help interpreting bid specs, preparing financials, or navigating unique bond requests.

Whether you’re pursuing work in Miami, Tampa, Jacksonville, or anywhere in between, we make it easy to stay compliant and competitive.

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Common Mistakes Contractors Make with Performance Bonds

1. Assuming You Don’t Need One on a Private Job

Even if not legally required, many private owners demand performance bonds. Failing to offer one could cost you the job.

2. Waiting Until the Last Minute

Performance bonds can’t always be turned around in hours—especially if your financials need review. Start early.

3. Using an Out-of-State Surety

Florida public projects often require sureties that are authorized to do business in Florida and are Treasury-listed.

4. Not Tracking Your Bonding Capacity

Taking on too many bonded jobs at once can exceed your capacity and limit future opportunities.

Let us help you plan ahead so bonding becomes a smooth part of your bidding process—not a barrier to growth.

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Conclusion: Performance Bonds Are More Than Protection—They’re a Path to Bigger Work

In the state of Florida, performance bonds are essential for any contractor looking to build a long-term, growth-focused business. They’re required by law on public work, expected by savvy private clients, and critical for building trust with project owners.

But beyond just meeting requirements, performance bonds show that you’re serious, prepared, and financially stable. They help you secure more jobs, build better relationships, and protect your business from the ripple effects of project failure.

At Florida Risk Partners, we make the performance bonding process painless. From helping you prep your financials to issuing your bond in minutes through our 24/7 platform, we’re here to support your success every step of the way.

Don’t let bonding be a bottleneck. Let it be a springboard.