Municipal, school board, hospital and other public tenders for snow removal often require bonds. A bond is not insurance for you. It is a guarantee to the client that you will perform the contract, backed by a surety company. If you fail, the surety pays the client and then looks to you for repayment.
Types of Bonds in Snow Tenders
- Bid bond: guarantees you will enter the contract if awarded.
- Performance bond: guarantees you will complete the work as specified.
- Labour and material payment bond: guarantees your subcontractors and suppliers get paid.
Qualifying for Bonding
Sureties look at your business the way a lender would: financial statements, working capital, experience, equipment, references and the size of the contract relative to your history. New contractors and those with weak financials may find bonding difficult or limited.
Bonds and Insurance Together
Tenders usually require both bonds and insurance, with specific limits and certificate wording. See insurance requirements for commercial snow contracts and municipal snow contractors.
Plan Ahead
Bonding takes time to arrange. If you plan to bid on public work this season, talk to a broker early. Municipal work is common in Ontario and Alberta.
SnowPlowInsurance.ca is an independent referral service, not an insurance company or broker. We connect you with licensed brokers who provide quotes and advice. How this site works.
Frequently Asked Questions
Is a performance bond the same as insurance?
No. A bond guarantees your performance to the client. If the surety pays, you are expected to repay it.
Can a new snow removal business get bonded?
It can be difficult. Sureties want financial history and experience. A broker can explain what is realistic.