BOND
Bonds can briefly be described as guarantees by insurance companies attesting to the credibility of an individual or Company. There are basically two of bonds available in the market. These are advance payment Bonds and performance Bonds.
Advance Payment Bonds
Advance Payment Bonds is a guarantee from the insurance Companies that the advance payment collected by the contractor will be spent to execute the contract, any short fall will be met by the underwriting company who issue the bond on behalf of the contractor.
Performance Bonds
A performance Bonds is a guarantee from an insurance company that in the event that a contract is not executed as demanded by the principal, the Underwriting Company who wrote the bond on behalf of the contractor will meet any short fall. |
