Performance Bond

[Hardline]

If a contract has a one year warranty will the entire performance bond be locked up until that warranty has expired? What I am really getting at is if we have to put up some kind of collateral to secure a bond, will that collateral be tied up for that entire time, or is some portion of it released after the project has been completed and bought off?

[Admin]

Collateral should be used as a last resort for bonding you would not qualify for otherwise. Usually, there are better alternatives than collateralizing a contract, as it lowers liquidity for you, which can ultimately increase the likelihood of a claim for the surety. With that said, I suggest you apply with our agency, as we have markets that most do not have access to. You can do so online at: Contract Bond Applications - JW Surety Bonds


To answer your collateral question, it is held until the project is completed signed off. So the collateral would be held during your maintenance/warranty period.