Performance Bond
Definition. A Performance Bond guarantees that a contractor will complete a project according to contract terms. Required on most public-works and large private construction projects.
Also known as: Contract Performance Bond
The surety company pays the project owner if the contractor fails to perform — then seeks reimbursement from the contractor. Bond amount typically 100% of contract value. Premium 1-3% of bond amount annually.
Sources cited
Need performance bond coverage?
Compare quotes from 10+ commercial insurance carriers in 5 minutes. Free, no contact info required.
Get My Quotes →Disclosures
📘 Educational content only.
Reviewed by California-licensed Property & Casualty insurance agent
Jason Wootton (CA License #0I94454). Not insurance advice, an individual recommendation, or a solicitation in any state. Insurance regulations vary by state. For specific coverage decisions, consult a licensed insurance agent in your state.
Advertiser disclosure.
Get Business Coverage is a licensed insurance referral service. We may receive
compensation when you click links to carrier partners or complete a quote. This
compensation may impact how and where products appear on this page, but it does
not influence our editorial content or research methodology.