Bond is an instrument to guarantee the performance of the Contractor in fulfilling the contractual obligations and terms.
Bond is an instrument to guarantee the performance of the Contractor in fulfilling the contractual obligations and terms as required by the Principal in a construction related contract. In the event of the non-performance of the Contractor, the Principal is entitled to demand the amount guaranteed in the Bond, which shall be paid by the Insurance Company accordingly. The Insurance Company, in turn, shall recover the losses from the Contractor and its guarantors.
A Tender Bond is required by a Contractor during the submission of tenders for contract jobs to the Principal. The main purpose of the Tender Bond is to guarantee that the contractor who is awarded the contract will undertake the contract under the terms at which the contractor has submitted and is capable of providing a Performance Bond thereafter.