Performance Bonds for Colorado Contractors
A performance bond is a surety bond (a written guaranty) from a third party (usually a surety company or insurance company) submitted to a principal (client or customer) by a contractor upon winning the bid. A performance bond ensures payment of a sum (not exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract. Performance bonds usually cover 100 percent of the contract price and replace the bid bond on award of the contract