What should I do when a project contract asks for insurance or a bond?
Separate the insurance clause from the bond clause and identify the entity, project, requested limit, bond type, obligee, and obligation in each. SBA describes bid, payment, and performance bonds as distinct contract surety categories; its guarantee program applies only to qualifying small businesses and bonds.[4]
Send the actual contract language to your broker or surety agent and ask them to match it to the proposed policy or bond wording. Do not treat one as a substitute for the other.[4]
Read the Real Estate and Construction Insurance Buying Guide
Sources and Further Reading
- Commercial Insurance Guide — California Department of Insurance. Form 700, revised June 14, 2024; commercial property, building ordinance or law, time element, inland marine, commercial general liability, and workers compensation sections.
California DOI overview of property interests, valuation, general liability, builder’s risk, inland marine, and other commercial lines; descriptions are general, not project terms.
- Small Business — National Association of Insurance Commissioners. What’s general liability? and What does general liability not cover?, lines 29–54; Other types of business liability insurance, lines 55–63; What is workers’ compensation?, lines 158–163.
NAIC explanations of professional E&O, general liability, property, cyber, and workers’ compensation for small-business buyers.
- Cybersecurity for Small Business — Federal Trade Commission. NIST Cybersecurity Framework section on managing cybersecurity risks and deciding whether cybersecurity insurance is appropriate.
FTC risk-management guidance on tracking requirements and deciding whether cybersecurity insurance is appropriate.
- Surety bonds — U.S. Small Business Administration. Contract or commercial bonds; bid, payment, performance, and ancillary bond categories; eligibility.
SBA descriptions of contract surety bond types and eligibility for its limited small-business guarantee program.
Spot, a product of Tools for Enlightenment, publishes this guide and works in the commercial insurance market. This is general buyer education; policy terms, the actual contract, and applicable law determine coverage and requirements.
Updated 2026-09-28. Editorial Policy
Get Help With Insurance Buying and Renewals.
Get help buying coverage and managing renewals, with less paperwork for your team. Start with a free consultation.
