Bond type Surety bond companies have actuarial information on the lifetime claims history for each bond type. Over time, surety bond underwriters are able to determine that some surety bonds are more risky than others. For example, a California Motor Vehicle Dealer bond has significantly more claims than a straightforward notary bond. If a given surety bond type has paid out a high percentage of claims, then the premium amount paid by applicants will be higher. Applicant's history/risk Surety bond companies attempt to predict the risk that an applicant represents. Those who are perceived to be a higher risk will pay a higher surety bond premium. Since surety bond companies are providing a financial guarantee on the future work performance of those who are bonded, they must have a clear picture of the individual's history. In the United States In the United States, under the Miller Act of 1932, all Construction Contracts issued by the Federal Government must be backed by performance and payment bonds. States have enacted what is referred to as "Little Miller Act" statutes requiring performance and payment bonds on State Funded projects as well. There are over 25,000 types of Surety Bonds in the United States. Each bond has a designated bond amount. Surety bond companies will determine the bond rate based on risk and then charge a surety bond premium in the range 1-15% of the bond amount. See also Completion guarantee General contractor Independent contractor Shop drawing Subcontractor Submittals (construction) Surety bond References Bonds (finance) Performance bonds