performance bond

American  

[per-fawr-muhns bond] / pərˈfɔr məns ˌbɒnd /

noun

1. an indemnity agreement or bond, usually issued by a bank or insurance company, to protect against loss due to breach of contract.

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performance bond British  

noun

1. a bond given by a bank to a third party guaranteeing that if a specified customer fails to fulfil all the terms of a specified contract, the bank will be responsible for any loss sustained by the third party

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Etymology

Origin of performance bond

First recorded in 1935–40

Example Sentences

Nonetheless, Lebo said the tiles are under warranty and a contractor’s performance bond remains in effect, two possible though difficult avenues to reimburse transit taxpayers.

From Seattle Times • Sep. 20, 2023

The second $1 million installment of the entry fee - which goes to a regatta officials fund - plus a $1 million performance bond is due by Dec. 1.

From Washington Times • Aug. 21, 2014

As part of the Forest Hill purchase, StoneMor posted a $3.6 million performance bond to cover potential shortfalls in prepaid contracts.

From The Wall Street Journal • Oct. 26, 2011

The authority did not issue a performance bond, a type of insurance on the contractor finishing work on a project.

From Reuters • May 12, 2010

Company officials, he insisted, believed that Reynolds' bill was for both a performance bond and general liability insurance, erroneously sent him a check large enough to cover both.

From Time Magazine Archive