Lien bonds are considered a higher risk form of bond for surety companies. The main reason is that they are inserting themselves into a situation where there is an ongoing dispute. Surety companies are not law firms and so may lack the ability to determine who is legally in the right. However, if a surety has issued a performance bond on a project they have a vested interest in seeing the project completed. If there is a dispute they may have a larger onus to issue a lien bond if they have already issued a performance bond on that project.
The cost for these bonds is between 2-3% of the value of the lien inclusive of court costs. So if a mechanics lien is filed for $500,000. The court would add 25% for court costs bringing the total value to $625,000. The premium would then range between $12,500 and $18,750. It should be noted that this premium is billed annually until the dispute is resolved and the lien bond is released from court and returned to the surety company.