What Is a Warranty Bond? (Also Called a Guarantee or Maintenance Bond)
A warranty bond is a surety bond that guarantees a contractor will repair defects in workmanship or materials for a fixed period after a construction project is completed — typically one to two years. It is also called a guarantee bond, maintenance bond, or construction warranty bond. The bond protects the project owner from having to pay out of pocket if the contractor refuses or is unable to honor the warranty.
| Attribute | Detail |
|---|---|
| Also known as | Guarantee bond, Maintenance bond, Construction warranty bond |
| Typical coverage period | 1–2 years (sometimes up to 5) |
| Typical cost | 1%–3% of contract amount (often bundled with a performance bond) |
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Warranty Bond vs. Guarantee Bond vs. Maintenance Bond: Same Thing, Different Names
A warranty bond, a guarantee bond, and a maintenance bond are essentially the same surety instrument under different names. The terminology varies by region and by who wrote the
construction contract:
- Warranty bond — the most common U.S. term, used widely in private and commercial construction.
- Maintenance bond — common in U.S. public works and federal contracts, where the bonded period is described as a “maintenance” obligation.
- Guarantee bond — common in the UK, the Commonwealth, and international contracts. Some private-sector contracts in the U.S. also use this term.
- Construction warranty bond — a more specific phrasing emphasizing the construction context. Mechanically identical.
If your project contract says “maintenance bond,” “guarantee bond,” or
“construction warranty bond,” you can satisfy that requirement with a
warranty bond from Swiftbonds. The underwriting, cost structure, and claims process are the same regardless of which name appears in your contract.
Swiftbonds issues all four variants. If you are unsure which is required for
your contract, see our performance bond hub or call us at (913) 214-8344 — we can read the contract language and confirm which bond satisfies the obligation.
Warranty Bond vs. Performance Bond: What’s the Difference?
A performance bond guarantees the work gets done.
A warranty bond guarantees the work will be done.
The two bonds cover sequential phases of the same project. The performance bond is active during construction; once the project is complete and accepted, the warranty bond takes over for the warranty period.
| Attribute | Performance Bond | Warranty Bond |
|---|---|---|
| Purpose | Guarantees project completion per contract | Guarantees defect repair after completion |
| Active period | During construction | 1–2 years after project acceptance |
| When it activates | If contractor fails to complete the work | If defects appear during the warranty period |
| Who pays the premium | Contractor (cost included in bid) | Contractor (cost included in bid) |
| Typical cost | 1%–3% of contract amount | Often bundled — same combined 1%–3% rate |
Most large construction projects require both bonds. Warranty and performance bonds are just two of the most common construction bond types, and Swiftbonds typically issues them together at a single combined rate. To learn more about warranty bonds, including coverage, claims, and pricing, see our complete guide. For land development projects, contractors and developers may also need a subdivision bond to guarantee the completion of required public improvements. See our
performance bond guide for the construction phase
bond and the performance bond cost calculator for combined pricing.
How Much Does a Warranty Bond Cost?
Warranty bonds typically cost 1%–3% of the contract amount,
using the same rate structure as performance bonds. In practice, warranty
bonds are usually issued together with a performance bond at a single combined
rate — you don’t pay separately for each bond.
The exact rate depends on bond size, credit score, and financial documentation:
| Bond Size & Profile | Credit 650+ | Credit Below 650 |
|---|---|---|
| Under $1,000,000 | 3.0% | 3.6% |
| $1M–$4M with CPA-reviewed financials | 2.5% | 3.6% |
| $1M–$4M without CPA financials | 3.0% | 3.6% |
| Above $4M with CPA financials (tiered) | 2.5% on first $4M, 2.0% above | 3.6% |
Example: On a $500,000 contract with a contractor credit
score of 700, the combined performance + warranty bond costs $15,000 (3.0%).
On the same contract with a credit score of 620, the bond costs
$18,000 (3.6%).
For an exact quote in 60 seconds, use the
performance bond cost calculator — the
same rate structure applies to your warranty bond. Or call us at
(913) 214-8344 for a custom quote.
Warranty Bond FAQ
What is a warranty bond?
A warranty bond is a surety bond that guarantees a contractor will repair defects in workmanship or materials for a fixed period — typically one to two years — after a construction project is completed. It protects the project owner from having to pay out-of-pocket if the contractor refuses or is unable to honor the warranty.
What does a warranty bond cover?
A warranty bond covers defects in workmanship and materials that appear during the warranty period. If a defect is discovered and the contractor will not or cannot fix it, the project owner can file a claim against the bond, and the surety company will pay to have the defect repaired up to the bond amount.
Is a warranty bond the same as a guarantee bond?
Yes. “Warranty bond,” “guarantee bond,” and “maintenance bond” are different names for the same surety instrument. The terminology varies by region — a guarantee bond is common in the UK and Commonwealth contracts, while a maintenance bond is common in U.S. public works. The underwriting, cost, and claims processes are identical.
What is the difference between a warranty bond and a maintenance bond?
There is no functional difference. Both bonds guarantee the contractor’s obligation to repair defects after project completion. “Maintenance bond” is the term used in most U.S. public works contracts; “warranty bond” is more common in private and commercial construction. If your contract requires a maintenance bond, a warranty bond satisfies the requirement.
What is the difference between a warranty bond and a performance bond?
A performance bond guarantees that the contractor will complete the work in accordance with the contract. A warranty bond guarantees the contractor will repair defects after the work is complete. Performance bonds cover the construction phase; warranty bonds cover the 1–2 year period after acceptance. Most large projects require both, and they are typically issued together at a single combined rate.
How much does a warranty bond cost?
Warranty bonds typically cost 1%–3% of the contract amount. Contractors with credit scores above 650 pay 3.0%; those with credit scores below 650 pay 3.6%. Bonds over $1M with CPA-reviewed financials qualify for a preferred rate of 2.5% (or a tiered 2.5%/2.0% rate above $4M). Warranty bonds are usually issued together with a performance bond at a single combined rate.
How long does warranty bond coverage last?
Warranty bond coverage typically lasts one to two years after project acceptance, though some contracts specify three to five years. The exact duration is set by the contract between the contractor and the project owner. The bond covers any defect that appears during this period.
Who pays for the warranty bond — the contractor or the owner?
The contractor pays the warranty bond premium. However, contractors typically build this cost into their bid, so the owner ultimately pays for it as part of the contract price. The contractor is the principal on the bond; the owner is the obligee (the protected party).
What happens if a contractor refuses to honor warranty work?
The project owner files a claim against the warranty bond with the surety company. The surety investigates the claim and, if it is valid, either pays the owner to hire another contractor to complete the repairs or arranges for the repairs directly. The surety then seeks reimbursement from the original contractor.
Can I get a warranty bond at the same time as my performance bond?
Yes — and you should. Most surety companies issue performance and warranty bonds together as a combined instrument at a single rate of 1%–3% of the contract amount. Swiftbonds can typically issue both bonds within 24 hours. Call (913) 214-8344 or apply online to get started.