Nuke is right, it is primarily in place to keep the "fly by nighters" from doing shoddy work. This is not a standard P&P bond. It isn't linked to either performance of work or payment of subs, it is to further insure against damage to city property. I agree with blast that it is somewhat redundant, especially when you can simply add the city as an additional insured. It is simply part of the price of doing business in my fair city.