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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Absolutely! Small businesses can get performance bonds too. There are options out there tailored for smaller contractors, so don’t worry, you won't be left in the dust.
The bond amount usually depends on the size and scope of the project. It’s typically a percentage of the total contract amount, ensuring it covers the job down to the last nail.
If the contractor doesn’t follow through, the performance bond kicks in. The surety company will step in to either finish the job or help you find someone who can.
To get a performance bond, you’ll need to work with a surety company. They’ll check your credentials and make sure you’re up to snuff before issuing the bond.
Usually, performance bonds are required by project owners, especially when it comes to construction jobs or public projects. It’s all about making sure everyone’s on the same page.
You’d need a performance bond to protect yourself if a contractor doesn’t stick to the plan. It’s a way to ensure that the project moves along smoothly without any hiccups.
A performance bond is like a safety net for contracts. It guarantees that a contractor will finish their work as promised, keeping everything in tip-top shape.