It's the historical data that makes it work. Collect all that data, compute median and standard deviation, and estimate as median plus one sigma or so as a safety margin.

There's outside monitoring. The completion bonding company will usually have someone on set watching every day, checking expenditures and progress.. "The completion bonder usually has a right of approval of the producer, director, and lead cast. These are not creative approvals. Rather, such approvals relate to reliability, tendency to cause over-budget results, history of substance abuse or other personal habits that have raised other issues as to reliability. ... Completion guarantors keep track of the on-budget track record of producers and directors and, it seems, cross-check with each other as to substance abuse or other extreme conduct relating to actors".

It's not that they need every single detail. Changes can be made during production. It's expensive changes that are a concern. Directors who tend to make expensive changes during production are known to completion bond companies, and that gets priced into the estimate. Not necessarily rejected, but priced in.