What is the main risk associated with not obtaining a performance bond?

The main risk associated with not obtaining a performance bond is potential project failure. A performance bond is a guarantee from a third-party surety company that the contractor will complete the project according to the contract terms. If the contractor fails to fulfill their obligations—such as not completing the work on time or adhering to quality standards—the bond provides financial protection to the project owner. Without this assurance, project owners face the risk that the contractor might default, which could lead to delays, additional costs to hire another contractor, and ultimately, the project's complete failure. Thus, the absence of a performance bond significantly heightens the risk of not achieving the project's goals, making it imperative for contractors to secure one to mitigate this risk.