Which contracts most often require a performance bond?

Equipment supply, construction, EPC, manufacturing, infrastructure and large international supply contracts — particularly where the buyer is a public body or a project-financed entity.

Does a performance bond guarantee the project will succeed?

No. It provides a defined financial remedy for specified contractual failures, subject to the bond wording. It does not guarantee performance itself or cover every possible loss.

Transaction Protection

Performance Bond & Surety

Additional security for a buyer or project owner where a seller or contractor fails to perform specified contractual obligations.

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What it covers

A defined percentage of contract value, commonly 5–20%, payable on a valid call
Applicable to equipment supply, construction, EPC, manufacturing and infrastructure contracts
On-demand or conditional wording depending on provider, market and negotiation
May be paired with warranty or maintenance bonds after completion

Commonly excluded

Obligations not described in the bond wording
Claims outside the validity period or notice requirements
Amounts above the stated bond value
Matters excluded by the surety or applicable law

Eligibility

Contract award or advanced tender stage
Financial, technical and track-record review of the contractor or supplier
Acceptable contract terms and jurisdiction

How a claim works

01Early notification of performance difficulty is strongly advised
02The beneficiary calls the bond in the form the instrument requires
03Evidence of default and contractual notices is normally examined
04We coordinate between the parties, the surety and legal advisers

Who it is for

Project owners and buyers under supply or construction contracts
Contractors and suppliers required to provide performance security
EPC, infrastructure and large international supply projects

Key benefits

Demonstrates the seller's financial standing during tender and award
Gives the buyer defined recourse if contractual obligations are not met
Can unlock contracts where performance security is a condition of award
Supports competitive bidding by international suppliers

Documents to prepare

Contract or tender documents and scope of work
Company profile and completed project references
Audited financial statements and bank references
Required bond wording from the beneficiary

Request a quote

Describe the transaction or exposure. We will confirm the information underwriters need and approach suitable providers through licensed partners.

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