Which type of bond guarantees job completion?

Which type of bond guarantees job completion?

• A. Bid Bond
• B. Performance Bond
• C. Payment Bond
• D. Maintenance Bond

Answer: (B)

A performance bond is the one that guarantees job completion. It protects the project owner by ensuring the contractor completes the project per the contract terms. If the contractor fails to perform, the surety can step in to finish the work or compensate the owner to complete it, up to the bond amount. This is different from a bid bond, which guarantees the bidder will enter into the contract if awarded; a payment bond, which ensures subcontractors and suppliers are paid; and a maintenance (warranty) bond, which covers repairs after completion for a specified period. So, the bond that guarantees completion of the project is the performance bond.

A performance bond is the one that guarantees job completion. It protects the project owner by ensuring the contractor completes the project per the contract terms. If the contractor fails to perform, the surety can step in to finish the work or compensate the owner to complete it, up to the bond amount. This is different from a bid bond, which guarantees the bidder will enter into the contract if awarded; a payment bond, which ensures subcontractors and suppliers are paid; and a maintenance (warranty) bond, which covers repairs after completion for a specified period. So, the bond that guarantees completion of the project is the performance bond.