Bond

A bond is a financial guarantee purchased by the contractor from a surety company. It protects the homeowner by ensuring that if the contractor mishandles progress payments, fails to perform, or violates the law, the surety will cover the homeowner’s loss (up to the bond amount).

Under NYC home improvement rules, a bond can be used in place of an escrow account. If you choose this route, the bond must guarantee the proper application or return of all payments the homeowner makes before the job is substantially complete.