What Is The Difference Between Performance & Warranty Bonds? Performance and Warranty Bonds are both Surety Bonds that are used in the construction industry, but both serve different purposes. From a Performance Bond guaranteeing that the contractor will complete a construction project to practical completion, to a Warranty Bond that provides assurance that the contractor…
What is An Advanced Payment Bond? An Advanced Payment Bond is a financial guarantee often used in construction contracts to ensure the contractor fulfils their contractual obligations when receiving advance payments. Issued by a Surety company, the bond safeguards the project owner’s financial interests. This blog will discuss everything you need to know about Advanced…
How Performance Bonds Protect Housing Associations There are many benefits of Performance Bonds to Main Contractors, but there are also benefits for Housing Associations. Performance Bonds provide additional financial protection to Housing Associations for the work that appointed Main Contractors undertake on their behalf. This article will discuss how Performance Bonds protect Housing Associations, and…
What Is a Construction Bond & How Do They Work? From Performance Bonds to Payment Bonds, there are several Construction Bonds that are used to ensure the completion of a construction project whilst protecting all parties involved financially. However, some contractors may not have come across a Construction Bond before. In this article, we will…
Do Performance Bonds Have An Expiration Date? Performance Bonds typically expire when the period specified in the bond wording comes to an end, or upon practical completion of the works. They can also be valid until any goods with defects are made. How long a Performance Bond lasts is usually based on the wording of…
How is A Performance Bond Calculated? Understanding how Performance Bonds are calculated is crucial for contractors and project owners, as Performance Bonds play a significant role in ensuring project completion and financial security. They offer protection to the project owner or obligee, typically by providing financial compensation in case the contractor or principal fails to…
Do Performance Bonds Cover Warranty? When a contractor takes out a Performance Bond, they may assume that it covers their warranty, however, that isn’t the case. A Performance Bond’s primary focus is on performance during the construction phase, it does not inherently cover post-completion warranty obligations unless specified. Some Performance Bonds may include limited warranty…
Who Issues Performance Bonds? Performance Bonds are usually issued by a financial institution such as a bank, insurance company, or a Surety Company as a form of financial guarantee and a form of security that contractors will meet their contractual obligations. This offers a level of protection against risks, ensuring financial protection. This article will…
What Is A Surety Bond? A Surety Bond is a legal obligation involving a three-party agreement between the principal (contractor), the employer (obligee/project owner), and the surety/guarantor. Surety Bonds protect the employer from financial loss in the event of default regarding contractual obligations, as detailed in the Bond wording and contract, that are not fulfilled.…
When Can I Release A Performance Bond? A Performance Bond is released when all the underlying covenants within the Bond wording and associated contract are satisfied. This is usually when practical completion (PC) of the contract is achieved, or at the end of the making good of defects (MGOD) period. In this article, we will…
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