This factor includes allowances for:

• General contractor's payment and performance bonds (1.5%)
• Builder's risk insurance (0.3%)
• Public liability insurance (1.5%)

Insurance and bonds are project overhead costs typically, but not always, charged by the general contractor. A contractor may be required by the owner to obtain insurance and bonds when bidding on a construction project. 44 CFR 13.36(h) establishes the minimum bond requirements for construction contracts or subcontracts under Federal grants.