--- title: Surety Bonds 101 description: Bid bonds, performance bonds, payment bonds, Gusso Surety Bonds breaks down everything owners should know about bonds before they bid. --- [Skip to content](https://gussosuretybonds.com/surety-bonds-101#main-content) [![phone-blue](https://gussosuretybonds.com/hs-fs/hubfs/Gusso%202022/phone-blue.png?width=17&name=phone-blue.png)605.339.7280](tel:6053397280) ##### 2913 East 57th Street Sioux Falls, SD 57108 [![Gusso Surety Bonds](https://gussosuretybonds.com/hs-fs/hubfs/Gusso%202022/gusso-brand.png?width=253&height=90&name=gusso-brand.png "Gusso Surety Bonds")](https://gussosuretybonds.com?hsLang=en) - [Who We Are](https://gussosuretybonds.com/who-we-are) - Services We Offer Show submenu for Services We Offer - [Bid Bonds](https://gussosuretybonds.com/bid-bonds) - [Performance & Payment Bonds](https://gussosuretybonds.com/performance-payment-bond-south-dakota) - [Commercial Surety Bonds](https://gussosuretybonds.com/commercial-surety-bonds) - [Gusso Business Advisors](https://gussosuretybonds.com/gusso-business-advisors) - Resources Show submenu for Resources - [Surety Bonds 101](https://gussosuretybonds.com/surety-bonds-101) - [Forms](https://gussosuretybonds.com/forms) - [Links](https://gussosuretybonds.com/links) - [FAQs](https://gussosuretybonds.com/faqs) - [Contact Us](https://gussosuretybonds.com/contact-us) - [Who We Are](https://gussosuretybonds.com/who-we-are) - Services We Offer Show submenu for Services We Offer - [Bid Bonds](https://gussosuretybonds.com/bid-bonds) - [Performance & Payment Bonds](https://gussosuretybonds.com/performance-payment-bond-south-dakota) - [Commercial Surety Bonds](https://gussosuretybonds.com/commercial-surety-bonds) - [Gusso Business Advisors](https://gussosuretybonds.com/gusso-business-advisors) - Resources Show submenu for Resources - [Surety Bonds 101](https://gussosuretybonds.com/surety-bonds-101) - [Forms](https://gussosuretybonds.com/forms) - [Links](https://gussosuretybonds.com/links) - [FAQs](https://gussosuretybonds.com/faqs) - [Contact Us](https://gussosuretybonds.com/contact-us) Resources   # Surety Bonds 101 ## Surety Bond Basics *What's a surety bond?* A surety bond obligates one party (the surety) to a second party (the obligee) to answer for the default of a third party (the principal contractor). ![DSC01686-1](https://gussosuretybonds.com/hubfs/Gusso%202022/DSC01686-1.jpg) ### What's a Bid Bond? A bid bond provides financial assurance that a bid has been submitted in good faith and that the contractor will enter into the contract at the price bid and provide the required performance bond and payment bond. ![TJS06084-1](https://gussosuretybonds.com/hubfs/Gusso%202022/TJS06084-1.jpg) ### What's a Performance Bond? A performance bond protects the owner from financial loss, should the contractor fail to perform the contract in accordance with its terms and conditions and completion timeframe – also provides one year of warranty protection. ![TJS-2](https://gussosuretybonds.com/hubfs/Gusso%202022/TJS-2.jpg) ### What's a Payment Bond? A payment bond guarantees that the contractor will pay subcontractors, laborers and suppliers associated with the project. --- ## It pays to be sure Have questions about construction surety bonds? We have all the answers and resources you need to make sure you’re confident in your project. [Read our faqs](https://gussosuretybonds.com/faqs?hsLang=en) [![Gusso-Logo-Stacked-White-L](https://gussosuretybonds.com/hs-fs/hubfs/Gusso-Logo-Stacked-White-L.png?width=100&height=109&name=Gusso-Logo-Stacked-White-L.png "Gusso-Logo-Stacked-White-L")](http://21711437.hs-sites.com) ## USEFUL LINKS: [Bid Bonds ](http://21711437.hs-sites.com/bid-bond-south-dakota) [Performance & Payment Bonds ](http://21711437.hs-sites.com/performance-payment-bond-south-dakota) [Commercial Bonds ](http://21711437.hs-sites.com/commercial-surety-bonds-south-dakota) [Gusso Business Advisors](http://21711437.hs-sites.com/gusso-business-advisors-south-dakota) [FAQs ](http://21711437.hs-sites.com/faqs)   **Gusso Surety Bonds, Inc** 2913 East 57th Street Sioux Falls, SD 57108 [605.339.7280](tel:6053397280)   [Contact Us](https://gussosuretybonds.com/contact-us?hsLang=en) --- ©2026 - All Rights Reserved