All About Performance Bonds

Performance Bond

Performance Bond

Among the different types of surety bond out there, a performance bond is perhaps the most important to doing business inside the United States. Also called a contract bond, these bonds are issued by either banks or insurance companies intended as a means to help ensure satisfactory completion of the task a company or individual has been hired to do, be it a large scale construction project or a smaller cleaning project. These bonds offer an additional level of insurance and peace of mind to people hiring contractors for whatever purpose and many important government and private contract will not happen at all unless the contractor takes out a performance bond.

Most contracts requiring payment and performance bonds also generally require a bid bond as contractors bid over selling their services to the client for the contract offered. The specific contractor who wins the bid generally receives payment and takes out a performance bond as a requirement to create some security as to the job’s completion. These bonds are occasionally based in the hundreds of dollars, though most go into the thousands and tens of thousands for the typical significant contract, sometimes reaching into heights of millions of dollars worth of a performance bond for truly massive contractors that absolutely can not be screwed up.

Once the bond is taken out, the work is begun. If the work is completed to the specifications laid out by the contract between the client and the contractor, then the contract is considered fulfilled. If the contract is not fulfilled, however, usually due to the contractor going bankrupt in the middle of a project, the performance bond kicks in and the client receives the payment fee from the performance bond. This is intended to compensate for monetary losses up to the value of the performance bond. The value of a performance bond is always agreed upon before any work begins, usually before the contract is even written.

Performance bonds and many other types of bonds are available from the Bondsexpress.com website. Offering a wide range of bonds for a number of states, Bondsexpress.com covers nearly any type of bonds that fulfill state mandated requirements for bonds. Among their surety bond products are performance bonds that can be used in a wide range of locations across the United States. The company offers bonds for both good and bad credit, as well as a wide range of bonds for specific types of contracts, ranging from public utilities work to household moving services. Some bonds are more generalized and the company offers other types of these bonds based on the customer’s needs. Customers can make special requests of the company for nearly any type of bond the customer may need to get their jobs done.

It is never pleasant for anybody when a contracted job fails to meet specifications. The right surety bond can and often will go a long way towards easing the minds of clients, particularly in trying economic times when money is tight for everybody.