Completion bond
A completion bond, also known completion guarantee is a type of surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor according to the terms and conditions of the contract. If the contractor fails to do so, the bond provides financial protection to the client (usually the project owner). If the contractor defaults or fails to complete the project, the bond issuer (the surety) steps in to cover the costs needed to complete the project, up to the bond amount. This caan help maintain trust and stability in the industry, ensuring that projects are completed as agreed and financial risks are managed effectively.
The contractor applies for the bond through a surety company, providing financial statements, project details, and other necessary documentation. The surety evaluates the contractor’s ability to complete the project, including their financial stability, experience, and track record. If approved, the surety issues the bond, usually for a fee or premium paid by the contractor.
If the contractor fails to meet the contractual obligations, the project owner can file a claim against the bond. The surety investigates the claim to determine its validity. If the claim is valid, the surety may provide financial compensation or arrange for the completion of the project through another contractor.
For project owners, completion bonds mitigate the risk of contractor default, ensuring project completion or financial compensation. For contractors, having a completion bond can enhance credibility and trust with clients, demonstrating financial stability and reliability. In some cases, particularly for public projects, obtaining a completion bond may be a legal requirement.
[edit] Related articles on Designing Buildings
Featured articles and news
Combating burnout.
The 5 elements of seiri, seiton, seiso, seiketsu and shitsuke.
Shading for housing, a design guide
A look back at embedding a new culture of shading.
The Architectural Technology Awards
The AT Awards 2025 are open for entries!
ECA Blueprint for Electrification
The 'mosaic of interconnected challenges' and how to deliver the UK’s Transition to Clean Power.
Grenfell Tower Principal Contractor Award notice
Tower repair and maintenance contractor announced as demolition contractor.
Passivhaus social homes benefit from heat pump service
Sixteen new homes designed and built to achieve Passivhaus constructed in Dumfries & Galloway.
CABE Publishes Results of 2025 Building Control Survey
Concern over lack of understanding of how roles have changed since the introduction of the BSA 2022.
British Architectural Sculpture 1851-1951
A rich heritage of decorative and figurative sculpture. Book review.
A programme to tackle the lack of diversity.
Independent Building Control review panel
Five members of the newly established, Grenfell Tower Inquiry recommended, panel appointed.
Welsh Recharging Electrical Skills Charter progresses
ECA progressing on the ‘asks’ of the Recharging Electrical Skills Charter at the Senedd in Wales.
A brief history from 1890s to 2020s.
CIOB and CORBON combine forces
To elevate professional standards in Nigeria’s construction industry.
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.