There is only one method that will absolutely guarantee the completion of your home improvement in the event that your contractor fails: a performance bond. Performance bond is simply an insurance policy in the amount of your construction contract, purchased by you (costs about 4% of the contract amount), and is secured by the contractor's assets and past performance record. It is difficult for non-reputable home improvement contractors to get bonding because the criteria to acquire one is very stringent.

CAUTION: Don't confuse the performance bond with the contractor's license bond. They aren't the same.