What are the benefits of a performance bond?
Performance bonds provide a number of benefits for both the contractor and the client, even though they're an additional expense to consider when bidding on a potential contract. For the contractor, simply being able to offer a performance bond can be a competitive advantage for a job that doesn't strictly require it. Everyone wants to know that they have some kind of recourse if your company doesn't perform as agreed, regardless of the reason.
For the person who needs work done, the performance bond is an extra assurance that their project will move forward, even if their initial choice of contractor isn't the one to do it. They'll know they've not gambled their money on someone they likely do not know very well and can find a replacement to finish the work if the original contractor doesn't follow through.
For both parties, performance bonds speak to experience and professionalism. A contractor who offers a performance bond is a contractor who has been around the block a few times and knows that sometimes, no matter how much you want things to go right, circumstances are just not in your favor. A project owner who accepts a performance bond is also reasonably assured that the contractor they're working with is experienced enough to understand the importance of this level of guarantee.