A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.
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Interesting Questions
Once a performance bond is issued, it usually can’t be canceled until the work is done unless both parties agree on different terms. It’s best to keep that bond running smoothly until the job is all wrapped up.
Yes, there are several kinds! You’ve got bid bonds, maintenance bonds, and performance bonds themselves. Each one serves a different purpose in the big picture of project management.
A performance bond generally lasts until the project is finished and accepted. Once everything is up to snuff, the bond can be released like a weight lifted off your shoulders.
If a contractor doesn’t pull their weight, the project owner can make a claim on the performance bond. This means the bond company steps in to cover the costs and make sure the work gets done.
Absolutely! Having a performance bond shows you're reliable and professional. It helps you stand out from the crowd and gives clients confidence in your abilities.
Getting a performance bond usually involves finding a surety company. They'll assess your credentials and help you secure the bond you need—it’s like putting together your project’s safety team!
Typically, government contracts and construction projects call for performance bonds. If it's a big deal and involves public funds, you can bet a bond is needed.