Benefits

Bonds Are Better For The Construction Project Owner
Bonds Are Better For The Contractor
Bonds Are Better For Subcontractors and Material Suppliers
Conclusion


Conclusion
The use of letters of credit as substitutes for Performance and Payment Bonds on construction projects is a bad deal for owners, contractors, subcontractors and material suppliers. In the case of publicly financed construction, they are a bad deal for taxpayers as well. Only corporate Performance and Payment Bonds can adequately protect construction purchasers and successfully ensure project completion.

* Under with permission : The Surety Association of Canada