What does Performance Bond mean? Read on to discover the definition & meaning of the term Performance Bond - to help you better understand the language used in insurance policies.
A performance bond is a bond meant to ensure one party's completion of a project to the satisfaction of the contract terms. It is often a condition of the contract. In case the project does not fulfill the obligations of the contract, the obligee, the one who requests or receives a bond from the principal, has a right to make a claim for monetary compensation. In this way, it is like insurance for an investment.
We hope the you have a better understanding of the meaning of Performance Bond.