What type of bond guarantees that if a contractor goes bankrupt on a project the surety will pay the necessary amount to complete the job

Question

Engineering

Madeleine Buchanan

31 March, 22:55

What type of bond guarantees that if a contractor goes bankrupt on a project the surety will pay the necessary amount to complete the job

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Answers (1)

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Keyon Lambert · Answer 1

Answer: Payment bond.

Explanation:

A payment bond is a type of guaranteed payment provided for a contractor which ensure that all subcontractors, suppliers, workers etc involved in a project will be duly paid. Payment bond usually comes along with performance bond especially in the construction industry, and it is obtained before the commencement of a construction project. This serves as a form of protection for subcontractors.