Performance bonds are a type of surety bond that help those hiring contractors manage risks and make sure the job is done right. In 2750 BC, the pioneering historian Herodotus reported the use of performance bond agreements as a form of surety. Today, across public and private sectors alike, performance bonds are used by owners to ensure that contractors are up to the task. The extra security that a surety bond offers is an important part of a successful project.
When the contractor fails to deliver based on the terms and conditions of the contract, a performance bond protects the owner from the monetary losses that are incurred. Though they are not insurance, surety bonds such as these provide major peace-of-mind to project owners who have a lot at stake. Let’s dive into the process of acquiring a surety bond, as well as some examples of performance bonds in action.
Determining When to Use a Surety Bond
Many project owners require contractors to provide a performance bond in order to secure a contract. Construction projects commonly utilize performance bonds as a way to make sure that building contractors deliver what they were hired to do in a satisfactory way. Whether you are a project owner or a contractor, knowing how to utilize performance bonds is a must to engage in competitive professional services. Whenever you have a project or provide a service that needs some extra security, a performance bond is worth looking into.
Acquiring a Surety Bond
The first step in acquiring a surety bond (such as a performance bond) is to get in touch with a professional agent or bond broker. They will establish a relationship with the contractor to determine their surety capacity and offer expert assistance wherever it’s needed in the contract process. Once the contractor understands the needs of the project at hand, they can submit their requirements to a surety company.
Viking Bond Service provides a hassle-free approach to performance bonds, giving contractors and project owners confidence in the successful completion of their job. Get started with our online surety bond application to get the process started today. Our easy quoting process and fast turnaround time means you can get your project bonded in a superior way. If you have any questions about performance bonds or the surety bond process, feel free to contact us.