A performance bond is a type of surety bond that guarantees a contractor will complete a project according to the terms of the contract. Commonly required on public works, government, and commercial construction projects, performance bonds help protect project owners from financial loss if a contractor fails to perform. This guide explains how performance bonds work, how contractors qualify, bond costs, claim procedures, and why bonding is important for business growth.

Performance bond costs typically range from 1% to 3% of the contract amount, depending on factors such as credit score, business experience, financial strength, and project size. This guide explains how performance bond pricing works, what affects your premium, how contractors qualify, and strategies for obtaining the most competitive rates on public works, commercial, and government construction projects.