Definition of "Contract bond"

DAVID SUTTON real estate agent
DAVID SUTTON C-21 VAN SYCKEL- GOLDEN POST

A guarantee of the performance of a contractor. In general, contract bonds are used to guarantee that the contractor will perform according to the specifications of the construction contract. If the contractor fails to perform according to contract, the insurance company is responsible to the insured for payment, up to the limit of the bond, which is usually for an amount equal to the cost of the construction project. The insurance company then has recourse against the contractor for reimbursement.

Have a question or comment?
We're here to help.

 
 
 
*** Your email address will remain confidential.
 
 
 

 

Popular Insurance Terms

Popular Insurance Questions