What type of bond is usually required for contractors to secure a project?

A performance bond is typically required for contractors to secure a project because it guarantees that the contractor will fulfill their contractual obligations. In the construction industry, this bond provides financial protection to the project owner, ensuring that the work will be completed according to the standards specified in the contract. If the contractor fails to meet these obligations, the performance bond allows the project owner to claim against the bond to cover the costs of hiring another contractor to complete the project or to remedy any defects.

This bond is crucial because it instills confidence in the project owner regarding the contractor's ability to deliver the project as promised, thus facilitating smoother project execution and financial security.

In contrast, while license bonds are required for professionals to ensure compliance with regulations, commercial bonds cover various business activities, and judicial bonds are related to court proceedings, they do not specifically relate to the performance of contractual obligations on a project like a performance bond does.