Bond is a guarantee of performance that normally comes in the form of either:
• Bank guarantee
• Insurance guarantee

The guarantee is given by the Insurer to accept responsibility for the performance of a contractual obligation entered into by one party (contractor) with another (principal) in the event of former’s default. Type of Bond :Tender BondIt is a guarantee that the contractor who is awarded the contract will enter into this contract at the terms that he has submitted to the principal. If the contractor is unable to maintain his quotation the bond will be liquidated and either the bank or insurance guarantee will have to indemnify (pay) the Principal for the damages sustained up to the amount of the Bond.
Performance BondIs required by the Principal to ensure that the contractor fulfills his contractual obligations within the period specified or in accordance with the specifications as outlined in the contract. The guarantee amount is normally calculated at 5% of contract value of the project.
Foreign Workers BondThis bond is in the form of insurance guarantee and is needed by the Immigration Department whenever an employer employs a foreign worker.