Insurance Bond – A performance bond is an Insurance Bond issued by an insurance company guarantee satisfactory completion of a project by a contractor. Performance bonds are commonly used in the construction and development of construction projects. If the contractor does not complete the project specified in the contract Insurance company will either pay for the completion of the project or hire a contracting firm to complete the project which is called a counter indemnity clause. This is standard clause in the Insurance Market. It Provides the Insurance Company with a legally binding undertaking from the contractor to indemnify against any claims that may arise from the principal.