A performance bond is a form of contract surety bond which may be required in support
of any type of contract. The majority of performance bonds are issued on behalf
of construction industry contractors in support of contracts they wish to enter
into with various government related or institutional organizations. Various large
commercial concerns and financial institutions may also require performance bonds.
While contracts requiring bonding are most commonly related to construction projects,
performance bonds are frequently required in support of contracts for the supply of
materials, services, labour and products of many kinds.
Performance bonds are most commonly issued in Canada and the U.S. By insurance companies
who are specifically licensed for this purpose (known as surety companies or sureties).
The party asking for the bond (eg. a municipal government) is known as the obligee.
The party providing the bond (eg. a construction contractor) is known as the principal.
Upon receipt of an application for performance bonding a surety will typically underwrite
the application in a manner similar to that used by a bank reviewing a request for a line of credit.
The following information is generally required by a surety when it is expected that contracts to be
bonded for a particular client may exceed $100,000:
company information questionnaire (see contractor questionnaire tab)
bank letter confirming company's credit line level (if applicable)
details of upcoming contract requiring performance bond (see bond requisition tab)
company financial statements, preferably prepared by a professional accountant who is not an employee of the applicant
Apply for a Bond
To apply for a bond, please complete our Bond Request Form, give us a call or send an email: