Policy snapshot
A bond that guarantees the contractor will perform the project as per the agreed terms, timelines, and quality standards.
What is Performance Bond?
Performance Bonds provide assurance to project owners that the contractor will complete the project as per the agreement. If not, the insurer steps in to compensate or complete.
What can it cover?
- In case the contractor defaults, delays, or fails to deliver the project as per specifications, the insurer will pay the project owner up to the bond amount or arrange for project completion. This protects public and private developers from construction risk.
Who should consider it?
- Large infrastructure and EPC firms, Contractors working on NHAI, MoRTH, or PWD projects, MSMEs executing turnkey or design-build contracts.
Key features to understand
- Activated upon signing the project contract
- Usually 5–10% of the contract value
- Valid through the execution phase
- Protects the principal from non-performance or delays
What deserves attention before you buy?
Coverage, exclusions, sub-limits, deductibles, waiting periods, warranties and underwriting can vary between insurers and policy versions. The policy wording and schedule remain the definitive contract. Novo can help you review the relevant terms for your requirement.
Read the wording, not just the brochure
The schedule and policy wording determine the actual contract.
Compare meaningful differences
Look at exclusions, limits, deductibles, conditions and claim requirements—not premium alone.
Think beyond purchase
Servicing and claims-related support can matter as much as placement.