A Performance Bond is a written guarantee from a third party guarantor submitted to a principal (client or customer) by a contractor on winning the bid. A performance bond ensures payment of a sum (not exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract.
ADVANTAGES:
• The owner of a project is assured of the completion of the project
• The owner does not need to incur additional costs
• Not deductible when using a performance bond, and you have lower premium costs.