A performance bond is given as a guarantee to clients by specialist insurers or banks on behalf of contractors and at their expense. The performance bond would bind the insurers to compensate clients (up to the amount of the bond obtained) in the event of a default by a contractor. For example, a building contractor may issue a bond to a client for the building which the contractor is building. If the contractor does not fulfill the contract per specifications, the client is protected to a guaranteed compensation.