Contractor bonding
The term ‘contractor bonding’ refers to a type of financial guarantee that contractors provide to clients to ensure the contractor fulfils their contractual obligations, such as completing the work according to the agreed terms, within the specified timeframe, and to the required standards. If the contractor fails to do so, the bond provides financial compensation to the client, allowing them to recover losses or complete the project.
Types of bonds commonly used in the construction industry include:
- Performance bonds, which guarantees the contractor will perform their obligations under the contract. If the contractor fails to meet the terms of the contract, the bond can be used to cover the costs of completing the project.
- Bid bonds, often used in the tendering process to assure the client that the contractor, if awarded the contract, will enter into the agreement and provide the necessary performance bond. If the contractor withdraws or fails to provide the bond, the client can claim compensation.
- Payment bonds, which ensure the contractor will pay subcontractors and other suppliers. If the contractor defaults on these payments, the bond covers the costs, protecting those who are owed money.
- Retention bonds ensure the contractor will address any defects or complete outstanding work during the defects liability period.
- Advance payment bonds guarantee the contractor will use any advance payments appropriately according to the contract.
See also: Bonds in construction contracts.
[edit] Related articles on Designing Buildings
Featured articles and news
ECA digital series unveils road to net-zero.
Retrofit and Decarbonisation framework N9 launched
Aligned with LHCPG social value strategy and the Gold Standard.
Competence framework for sustainability
In the built environment launched by CIC and the Edge.
Institute of Roofing members welcomed into CIOB
IoR members transition to CIOB membership based on individual expertise and qualifications.
Join the Building Safety Linkedin group to stay up-to-date and join the debate.
Government responds to the final Grenfell Inquiry report
A with a brief summary with reactions to their response.
A brief description and background to this new February law.
Everything you need to know about building conservation and the historic environment.
NFCC publishes Industry White Paper on Remediation
Calling for a coordinated approach and cross-departmental Construction Skills Strategy to manage workforce development.
'who blames whom and for what, and there are three reasons for doing that: legal , cultural and moral"
How the Home Energy Model will be different from SAP
Comparing different building energy models.
Mapping approaches for standardisation.
UK Construction contract spending up at the start of 2025
New construction orders increase by 69 percent on December.
Preparing for the future: how specifiers can lead the way
As the construction industry prepares for the updated home and building efficiency standards.
Embodied Carbon in the Built Environment
A practical guide for built environment professionals.
Updating the minimum energy efficiency standards
Background and key points to the current consultation.
Heritage building skills and live-site training.