Performance Bonds: What They Are, and Why Your Project Might Need One
In the world of construction and development, uncertainty comes with the territory. Delays, disputes, and disruptions can put pressure on timelines, budgets, and relationships. One way to protect all parties and keep things on track is by securing a Performance Bond—but what exactly does that mean, and when is it necessary?
At Compariqo, we regularly work with developers, contractors, and brokers to arrange performance bonds that safeguard project outcomes. Here’s what you need to know.
What is a Performance Bond?
A Performance Bond is a type of surety bond issued to ensure that a contractor fulfils their obligations under a contract. If the contractor fails to deliver the agreed-upon work—whether due to insolvency, delays, or other issues—the bond provides financial protection for the developer or project owner.
It’s not insurance in the traditional sense. Instead, it’s a three-party agreement between:
- The Principal – the contractor who carries out the work
- The Obligee – the project owner or developer
- The Surety – the provider (through Compariqo) who guarantees compensation if the contractor fails
Why Might Your Project Need One?
Performance Bonds are often a requirement, not a choice. But even when optional, they can provide serious benefits. Here’s when and why they come into play:
Public or Funded Projects
Government contracts or projects backed by lenders and investors frequently demand performance bonds as standard. These stakeholders want to ensure their investment is protected if things go wrong.
High-Value or Complex Projects
The larger and more complex the build, the greater the risk. Performance bonds provide reassurance that the contractor is financially stable and committed to delivering on time and to spec.
First-Time Partnerships
When a developer and contractor are working together for the first time, trust hasn’t been built yet. A performance bond offers a layer of security that supports the relationship.
How Compariqo Supports You
At Compariqo, we don’t just provide bonds—we help navigate the process.
- Fast Turnarounds – We understand project deadlines and work to secure bonds quickly.
- Flexible Solutions – Whether you’re a seasoned contractor or a developer working with smaller or non-standard builds, we can help.
- Expert Support – Our team works with you and your broker to explain requirements, prepare documentation, and liaise with underwriters.
Do You Need a Performance Bond?
If you’re unsure whether your project requires one—or how to get started—we’re here to help. We work with a range of providers and specialise in supporting complex or first-time bond requirements.
📩 Speak to our team today on 0151 221 9665
🔗 Or get a quote today