Completion Bond

What Does Completion Bond Mean?

A completion bond is a guarantee, typically in the form of a surety bond, that ensures a given project will be completed. This means that even if something goes wrong or the original financing is withdrawn for any reason, the project will still reach completion. Completion bonds are similar to insurance in that they protect against specific financial risks.

Insuranceopedia Explains Completion Bond

Completion bonds are often required for large-scale construction or film projects due to the extended timelines, which can span months or even years. Without a bond, the potential risks may be too high for investors to commit their funds.

For instance, a movie studio might secure a completion bond to attract investors for a film production. With the guarantee of a completion bond, investors have a safeguard to recover their losses if the movie is never completed, making them more likely to trust the studio’s ability to finish the project.