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Schaedler Insurance & Bonding Services specializes in Performance Bonds for California contractors. Have questions or would you like to request a quote? Please give us a call or complete the contact form on this page and a surety bond specialist will contact you shortly.
What Is A Performance Bond?
A Performance Bond is a type of Contract Bond that guarantees a contractor will complete a project according to the terms outlined in the contract and are often required for public and private projects. If a contractor fails to meet the terms outlined in the contract, the owner can make a claim against the contractor’s bond seeking to recover financial damages. Performance bonds are one of the most common types of construction bonds and are often issued in conjunction with payment bonds. It’s important for contractors to know that performance bonds are fully indemnified so in the event of a claim, the contractor is responsible for repaying the surety the amount of the claim plus expenses, unlike insurance. In some instances, a surety may work with a project owner following a claim to hire a new contractor in lieu of providing a cash settlement to the project owner.
How Much Does A Performance Bond Cost?
The cost of a given performance bond will fluctuate greatly based on several factors. The two primary criteria commonly used by surety’s when determining how much to charge for a performance bond is the amount of the bond in addition to the financial strength/experience of an applicant. Performance bonds are generally a few percent of the bond amount given an applicant is financially strong, though not all contractors will qualify for a bond at any price. Because performance bonds are fully indemnified, a surety is looking for an applicant that is financially sound enough to repay the surety in the event of a claim, otherwise they will not issue a bond. As such, the larger the bond amount being requested, all things being equal, the more difficult it will be for a contractor to qualify. Often times, the cost of a performance bond is included in a contractors bid, effectively passing the cost on to the project owner.
Getting a Performance Bond Quote
Getting a quote for a performance bond is simple. Just complete the contact form on the right side of this page and select “performance bond” in addition to any other types of bonds you may need for your project, such as a bid bond or payment bond. A surety bond specialist from our office will then follow up with you shortly to answer any questions you may have as well as provide the appropriate applications based on the type of bonds you need, as well as the bond amounts for each. We will also advise you on the bonding process and what additional information may be required by our underwriters so we can get you an accurate estimate as quickly as possible.