Performance Bonds

Performance Bonds: A person using a calculator while getting ready to write on a notepad.
Performance Bonds enable contractors to enter into contracts with peace of mind, acting as a surety to ensure satisfactory completion of an agreed project.

This type of insurance covers the non-performance of a contractor or instances where contractors default on their contract. Other types of Bonds you may want to consider include:

  • Road and Sewer Bonds – Local authorities and statutory agencies require bonds in connection with agreements under the Highways, Water and Planning Acts and other statutory provisions. The bond guarantees the completion of roads and sewers to enable them to be adopted by the relevant local authority. They are frequently required by property developers and house builders.
  • Advance/Stage Payments Bonds – Advance or stage payments are often required particularly in respect of large contracts, to assist with the contractor’s mobilisation costs or the cost of raw materials. In exchange, the contractor will arrange for their surety to provide an Advance Payment Bond that will protect the customer in the event of the contractor defaulting under the terms of contract.
  • Retention/Maintenance Bonds – Instead of monies being held for the duration of a contract, the contractor can provide a bond as an alternative. The bond guarantees that the contractor will fulfil its maintenance (or defects liability) obligations under the contract.

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