Performance Bonds

A Performance Bond guarantees faithful performance and completion of a construction project. The critical condition is the need for collateral property or investment to back up the requirements of the surety agency. A Performance Bond is usually issued by a bank or an insurance company, and acts as the “Surety”.

Performance Bonds are typically 50% of the contract amount, however, can also be issued for 100% of the contract amount. It should be noted that a Surety is never liable for more than the total amount of the Performance Bond.

What are the benefits of a Performance Bond?

• Gives the owner protection and insurance to fix a problem caused by a default
• Responds from the first dollar
• Non-intrusive protection