Construction contracts require performance and payment bonds equaling what percentage of the contract?

In construction contracts, performance and payment bonds are typically required to equal 100% of the contract amount. This standard ensures that the contractor has sufficient financial backing to complete the project as specified in the contract and to fulfill any obligations regarding payments to subcontractors and suppliers.

The bonds serve as a guarantee for the project owner that if the contractor fails to perform or does not pay its bills, the surety company that issued the bond will step in to cover the costs up to the full contract amount. Requiring bonds at this level helps to protect all parties involved in construction contracts, promoting a secure and reliable work environment.

Other percentages such as 50%, 75%, or 125% could be applicable in specific scenarios or discussions, but the standard industry practice for contracts would typically mandate bonds equal to 100% of the contract to ensure comprehensive coverage.