In the event that the contractor fails to perform its obligation under the contract, the owner may make a claim under the performance bond. If the claim is founded, the bond company will then assume the responsibilities of the contract as per the terms and conditions of the contract. In the event of a default, the bond company may:
Complete the contract involving the original contractor by providing any required financial, management or technical support.
Re-tender to a new contractor and pay for the cost of completion in excess of the contract price.
Pay to the owner the total amount of the bond.
The bond company will look to you for repayment after a claim under the terms of the Indemnity Agreement.