US construction uses surety bonds, not a defect repair deposit
Korea requires a developer or contractor to deposit a defect repair security calculated as a small percentage of project cost. US practice does not use a deposit of that kind. Instead the contractor buys surety bonds: a performance bond guaranteeing completion, a payment bond protecting subcontractors and suppliers, and often a separate maintenance or warranty bond covering defects for a period after acceptance. The contractor pays a premium; the face amount is not cash handed over.
How the amounts are set. On federal construction contracts above the statutory threshold, the Miller Act at 40 U.S.C. ยง3131 requires a performance bond in the amount the contracting officer considers adequate, in practice the full original contract price, plus a payment bond. Every state has a Little Miller Act for state and local public work, with its own threshold and percentages. Maintenance bond rates are set by the contract documents, so that field starts at zero for you to fill in.
What the premium represents. A surety premium is a rate applied to the bonded amount and varies with the contractor's financial strength, experience and the size of the job; it is not fixed by statute. Figures on this page are current as of September 2026, and the Miller Act threshold is set by the statute as implemented through the Federal Acquisition Regulation, which is periodically revised, so it should be verified before use.
This tool produces an estimate from the rates you enter and does not confirm what bonding your contract requires or what a surety will charge. Bond forms, warranty periods and claim procedures are governed by the contract and the applicable statute. This calculator is for reference only and is not legal advice. Consult a licensed attorney or your surety broker about your specific situation.
Frequently Asked Questions
No. The contractor pays a premium and the surety guarantees the face amount. Cash retainage withheld from progress payments is a separate mechanism.
Usually a maintenance or warranty bond written for a set term after acceptance, at a percentage fixed by the contract documents rather than by statute.