Performance Bond - Changes

[Carboholic]

I am in the process of applying for a Performance Bond and the application asks for an estimate of costs and the completion date. What happens if down the line, the costs well exceed what was estimated or the project takes much longer than expected? Does the bond cover the excess or do I need to obtain another bond?

[Riskwriter]

If there are change orders to the job, the performance bond you have will cover the additional amounts under the contract. However, when the job is completed, the bonding copmany and/or agent will do what's called a "General Status Inquiry" to obtain written confirmation of the jobs completion. If there are change orders on the job, the bonding company will charge you the additional premium owed for the risk they took on that additional amount.

Just keep that in mind when putting your figures in for change orders....in the end you will need to pay surety additional premiums.