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Annual Performance Bonds

Annual Performance Bonds

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- Welcome back to Work in Progress. I'm Ben Williams with MG Surety Bonds and this is our show dedicated to surety bonding and all things construction. Today we're continuing to talk about the basics and we're gonna tell you everything you need to know about performance bonds, stay tuned. (upbeat motivating music) So why are you being asked for a performance bond? Well like we said on bid bonds, any federal project $150,000 and up is required to have a performance bond. Many states have adopted similar legislation, and many private owners and contractors also require them to reduce their risk. A performance bond is a three party guarantee between a surety, an obligee and a principal. The surety is the bond company guaranteeing the obligation. The obligee is who is benefiting from the bond such as an owner or an upstream contractor. And the principal is the contractor providing the bond. Now a performance bond guarantees that a contractor is gonna complete a project ing to the contract

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