Performance Bonds: Guarantee Project Success & Protect Your Capital
A performance bond is your commitment to the Obligee that the contract will be completed as specified — backed by the financial strength of a Canadian surety underwriter.
What is a Performance Bond?
[PLACEHOLDER] A performance bond is issued by a Surety to the Obligee (project owner) on behalf of the Principal (contractor). It guarantees that the contractor will complete the project in accordance with the contract documents. If the contractor defaults, the Surety is obligated to remedy the situation — either by completing the project itself, hiring a replacement contractor, or providing financial compensation up to the bond penal sum.
[PLACEHOLDER] Performance bonds are a standard requirement on public sector projects in Canada, and increasingly required by private sector Obligees on larger construction contracts. The bond amount is typically 50% or 100% of the contract value.
Underwriting Requirements
[PLACEHOLDER] Performance bond underwriting is more rigorous than bid bond approval. The surety is making a significant financial commitment and needs to assess your company's financial strength and project management capability. Here is what you will typically need to provide:
Corporate Financial Statements
[PLACEHOLDER] Audited or reviewed financial statements for the last 2–3 fiscal years. The surety assesses liquidity, working capital, and overall financial health.
Personal Net Worth Statement
[PLACEHOLDER] A personal financial statement from the company principal(s). The surety uses this to evaluate personal financial backing for the corporation.
Work-in-Progress (WIP) Schedule
[PLACEHOLDER] A detailed schedule of all active projects — contract value, % complete, billings to date, and estimated costs to complete. This demonstrates your capacity to take on additional work.
Bank Reference Letter
[PLACEHOLDER] A letter from your primary banker confirming your credit facility, operating line, and relationship history.
Project Details
[PLACEHOLDER] Contract documents, project specifications, and the identity of the Obligee. The surety reviews the nature of the work to assess risk.
Why We Share This Upfront
[PLACEHOLDER] We believe in transparency. Contractors who come prepared with complete documentation move through underwriting faster and receive better terms. ContractBonds.ca helps you prepare your submission before it reaches the surety — maximizing your approval rate.
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