Performance bond

Performance bond or also known as the performance bond is a guarantee issued by an insurance company to ensure the completion of a project well by the contractor.

For example, a contractor who is building a building that are required to submit a performance guarantee by the client. If the contractor fails to build the building in accordance with the specifications listed in the construction contract (usually due to bankruptcy sikontraktor) the losses suffered by the client will be secured with the performance guarantees. The term of this performance guarantee is also commonly used in housing construction.

This term is used also in the placement of security to ensure the implementation of transactions in futures contracts, which is usually known as the margin.

This performance bond has been known since 2750 BC (before Christ) and in the year 150 AD (BC) of Rome made a law guaranteeing valid until now.