What are Performance Bonds Used For?
When it comes time to bid on a project, you give it your all. You invest the time and money into writing out a bid that is going to help you land the project and choose every detail carefully. As part of the process, you may want to consider the value of investing in surety bonds. These types of bonds help to protect the client or owner of the project. They assure the client you will perform the tasks you’ve promised the way you agreed to do so. Performance bonds are one specific type of surety bond, and they can be very valuable when it comes to winning over new clients.
What is a Performance Bond?
A performance bond has the specific goal of providing reassurance to the client that you will complete a project the way you promised. Bid bonds, by comparison, promise that you’ll meet the terms of your bid in the actual contract. If you fail to complete the work in accordance with the terms of the contract you signed with the client, the surety company, which issues the performance bond, will be required to complete the project to meet the goals of the contract.
When Should You Use a Performance Bond?
When bidding on a project, performance bonds should nearly always be a part of the project offer. It shows the client that you are guaranteeing the work will be done the way they want it to be done, based on the contract details. And it gives your client the ability to have confidence in you, something that is very important if they have no track record of working with you previously. It may be required for some projects, including federal, state and local government projects.
Performance bonds and all types of surety bonds can be an ideal investment for many businesses. Before you bid on a project, consider how you will stand out from the competition and secure this lead. If you’ve put the time into creating a bid to win them over, don’t miss out on the opportunity because you lack the required or desired surety bond or performance bond especially when they are easily within reach.
Get the protection you need. Call Pan American Insurance at (888) 726-3380 for more information on El Paso surety bonds.