Performance bonds are different from insurance in one critical way. With insurance, the insurance company provides your business with a policy, if your business experiences one of the perils in your insurance policy the insurance company will provide you with compensation.
With a performance bond the coverage is provided to the project owner (also called the Obligee). If the project owner makes a valid claim against your performance bond and the surety is forced to pay a claim, they will then look to your business to recover those losses.