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Understanding Payment Performance Bonds in Construction Projects
Payment performance bonds are essential financial tools used in construction to ensure project completion and fair compensation. These bonds combine two key protections: performance bonds, which guarantee that the contractor will fulfill the contract as agreed, and payment bonds, which ensure that subcontractors, workers, and suppliers are paid properly. Often required for public and large-scale private projects, payment performance bonds help reduce the risk of financial loss, delays, and legal disputes. If the contractor defaults, the surety steps
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