A Bid Bond, also known as a Tender Bond, can sometimes be a requirement of a tender process. It is often, for example, required with the submission of a public work contract.

Usually an On-Demand Bond, a Bid Bond is submitted with a tender to secure the tender’s commitment to commence the contract. This bond protects the project owner in the event of the successful contractor failing to execute the contract or meet other specified conditions, for example: to provide a Performance Bond which is required to commence the project.