Performance bonds are the guarantees by a bonding company that jobs will be completed as per the specifications of the contract. In case a surety incurs a loss on your performance bond, you are responsible to pay back to the bonding company.
In order to see if you qualify for bonding, you will be required to submit business financials including the following:
The Infographic titled as “What are performance bonds” describes about various important facts related to the performance bonds. These include the following:
Performance bond only protects the obligee or owner of the project. No one else can file a claim.
The bond is available if a contractor fails to meet his contractual obligations due to a default bankruptcy, etc.
- The losses must be quantifiable in order to be covered by bond benefits.
The bond is to ensure that the project is completed.
For further information regarding performance bonds, refer the given Infographic.