Janitorial Performance Bond

As more and more municipalities outsource tasks, a janitorial performance bond is often required.  Working with a surety bond agency that has experience obtaining surety bonds for non construction related companies will make obtaining the bond much easier. Since 2003, Surety1 has been the source for obtaining performance bonds for service companies.

Janitorial Service performance bonds are not underwritten the same way as construction related bonds. A bricks and sticks bond agency will usually require a lot more information than necessary to obtain these types of bonds.

What does a janitorial performance bond cover?

A performance bond provides the owner, referred to as the obligee, with a third-party guarantee of the performance of the contract. If the company does not perform, the surety would be responsible for hiring a contractor to perform the contract at no additional cost to the owner. Sometimes the performance bond is paired with a payment bond. The payment bond guarantees that sub contractors (rarely used on janitorial service contracts) and suppliers are paid.

Most surety companies will require an annually renewable performance bond. As the contracts for janitorial services are usually multi-year, the surety will want to be in a position to limit its exposure to 1 year at a time. Making the bond annually renewable will accomplish this. Most municipalities will accept the specialized form.

Not to be confused with the business service bond

A performance bond for janitorial service companies is contract specific. Many janitorial companies want to be bonded. In these cases, when there is no bond requirement, a janitorial service company can purchase what is referred to as a business service bond. This bond is a third party fidelity bond. It covers dishonest acts of the firms employees, subject to a conviction clause.