A contract bond:

A contract bond:

• A. guarantees job completion only
• B. guarantees payment of all labor and materials only
• C. guarantees the project will be insured
• D. guarantees job completion and payment of all labor and materials

Answer: (D)

A contract bond is a type of surety that protects the project owner by guaranteeing both that the contractor will finish the work and that all labor and materials will be paid for. It combines two protections: a performance guarantee to ensure the project is completed as agreed, and a payment guarantee to ensure subcontractors and suppliers are paid. This is why the correct statement says it guarantees job completion and payment of all labor and materials. It’s not insurance for the project; the bond is backed by a surety and activated if the contractor defaults, with the surety stepping in to complete the work or cover unpaid claims up to the bond amount.

A contract bond is a type of surety that protects the project owner by guaranteeing both that the contractor will finish the work and that all labor and materials will be paid for. It combines two protections: a performance guarantee to ensure the project is completed as agreed, and a payment guarantee to ensure subcontractors and suppliers are paid. This is why the correct statement says it guarantees job completion and payment of all labor and materials. It’s not insurance for the project; the bond is backed by a surety and activated if the contractor defaults, with the surety stepping in to complete the work or cover unpaid claims up to the bond amount.