Performance Bonds are meant to protect the owner from any financial loss of the contractor fail to perform the contract in accordance with its terms and conditions. The infographic “Understanding Performance and Payment Bonds” uploaded by Neilsonbonds.com is specifically designed to help you understand the working of performance and payment bonds.
The Payment Bonds give the assurance that contractors will pay the subcontractors, laborers and suppliers on time. The process of Surety Bond Process includes:
A contractor obtains a bid bond form the surety company and submits it with an accurate bid proposal.
Once awarded the project, the contractor requests a performance bond from the surety company.
The contractor completes the work successfully as per the specifications on the contract.
After the project is completed, the performance bond is fulfilled and ends.
There is a long list of associated with the firms who have the privilege of performance bonds for their bids such as, it will be more trusted by the project owner and it also protects the laborers and sub-contractors from non-payment and hence ensuring them against non-payment. You can also refer to the below infographic to know more about such interesting facts on Performance Bonds.