An Advance Payment Bond is a guarantee, arranged by the party receiving an advance payment, to the party advancing the payment.
A Construction Performance Bond agreement usually involves the below parties
The Surety – Insurer
The Contractor – appointed on the development in question
The Beneficiary – the party to whom the Insurer will pay compensation to
What does a Construction Performance Bond do?
A Bond gives peace of mind against the possibility of a Contractor failing to carry out all their responsibilities under a contract. Should the Contractor be in breech of contract the Insurer will compensate the Beneficiary as stated in their contract.