Bonds are often required on larger jobs. A bond company will charge approximately what percentage of its fee based on the contract price?

The correct range of 1-2% for bonding fees on larger jobs reflects a common industry standard. When a bond company provides a bond, it assesses the risk associated with the job, including the contract price, the contractor's history, and the scope of the work. The fee charged is typically calculated as a percentage of the total contract price to mitigate the risks and ensure financial security for all parties involved.

A bond serves as a guarantee that the contractor will fulfill their contractual obligations, and the cost of obtaining that bond generally falls within the 1-2% range for most larger projects. This serves to balance affordability for contractors while still covering the bond company's potential liabilities. Higher percentages can occur in special cases with increased risk factors, but 1-2% is a standard expectation, aligning with industry practices.