Performance Guarantees

A Performance Guarantee is issued by an insurance company or bank to a contractor to guarantee the full and due performance of the contract according to the plans and specifications.

A project requiring a payment & performance bond will usually require a bid bond, in order to qualify to bid for the project. A payment and performance bond will then be required of the winning bidder as a security to guarantee job completion.

Should the contractor fail to construct the building according to the specifications laid out by the contract, the client is guaranteed compensation for any monetary losses up to the amount of the performance bond.