Bid and Performance

Both bonds are types of surety bonds.

  • A bid bond is usually required of contractors bidding on construction work to ensure that the successful bidder will both accept the job and provide a performance bond.
  • A performance bond protects against unmet contractual obligations. For example, it ensures a property owner (such as a municipality) the completion of a construction contract, or in the event that the contractor fails to complete the project, payment of damages.