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

Denisse

Engineering

12 May, 17:29

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

+2

Answers (1)

Know the Answer?

Mariyah Bowers · 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.