Performance Bond is guaranteed that the Contractor fulfils the contractual obligations towards the completion of the contract.
Bond is an instrument to guarantee the performance of the Contractor in fulfilling the contractual obligations and terms as required by the Principal in a construction related contract. In the event of the non-performance of the Contractor, the Principal is entitled to demand the amount guaranteed in the Bond, which shall be paid by the Insurance Company accordingly. The Insurance Company, in turn, shall recover the losses from the Contractor and its guarantors.
A Performance Bond is required in the event a Contractor’s tender has been accepted by the Principal and a Letter of Award is issued. The main purpose of the Performance Bond is guarantee that the Contractor fulfills the contractual obligations towards the completion of the contract.