Who Pays for a Performance Bond

Who Pays for a Performance Bond?

Nationwide Sureties are the UK’s trusted provider when answering key questions like Who Pays for a Performance Bond and securing the best bond solutions for your project. We source the most competitive quotations from multiple providers, ensuring you benefit from favourable costs and terms.

• Competitive Premiums
• Access to the Entire Surety Bond Market
• Quick and Simple Application Process
• Expert Advice on Who Pays for a Performance Bond and How It Works
• ABI, On-Demand, Adjunction, or Hybrid Wordings Considered

Understanding Who Pays for a Performance Bond

When asking Who Pays for a Performance Bond, the answer is usually the contractor or subcontractor awarded the contract. While the Performance Bond protects the employer or project owner, it is typically the contractor who arranges and pays for the bond premium as part of their contract obligations. The bond amount is generally set at around 10% of the contract value, though this can vary depending on project requirements.

How the Payment for a Performance Bond Works

In the process of securing a bond, Who Pays for a Performance Bond becomes clear: the contractor bears the cost. After applying and being underwritten by a surety provider, the contractor pays a premium (usually a small percentage of the bond value). In return, the bond is issued to protect the employer against potential losses if the contractor fails to fulfil their contractual obligations. The contractor includes this cost in their overall project pricing.

What we require to arrange your Performance Bond:

To proceed, we require contract details including the bond amount, period required, and a completed application form, along with:

• A copy of the bond wording (If none specified, we can suggest suitable wording)
• Your most recent published accounts (including group accounts, if applicable)
• Your latest management accounts (up to the latest quarter)

Once we receive this information, your Who Pays for a Performance Bond application will be submitted to our panel of underwriters. They will assess your financial strength and project details to offer competitive terms quickly.

Upon acceptance of terms and submission of any additional information, we will issue security documents (such as the deed of counter-indemnity) and the premium invoice. Once the paperwork and premium are received, we will issue your Performance Bond.