A Performance Bond is a type of contract bond that holds the contractor to the terms and conditions of the contract. When you win a contraction contract, you concurrently present a performance bond. Payment bonds and performance bonds are usually issued together in California, since they are very similar.
Performance Bonds usually cost between half a percent and upto 20%, depending on the contractor credit score. This variance depends on a few factors. A contractor with a good credit score might be in a free range of 0.5-5% of the bond. While some surety companies won’t work with bad credit, a larger fee of 10-20% of the bond, may be charged.
These Performance Bond fees help protect any monetary loss, if the contractor fails to build exactly what the client wants. Insurance on proper work done can help set the mind at ease, with satisfaction guaranteed. Keeping subcontractors and materials distributors paid and happy will keep your business paid and happy as well!
When we aren’t crunching over the changing bond market data, or updating our Contractor General Liability Insurance Services, we’re finding other ways to save you time, and money. With a quick call to Rock 10 Insurance Services at 866-376-2510, we can get you covered with a free quote today! Scroll down to see our easy online form option as well.