Bonds

Overview

Our insurers are specialists in providing bonds to contractors employed by housing associations, local authorities or city or county councils. These bonds are often an essential part of tendering for work. There are four main bond types, summarised below, which avoid the significant problems of bank bonds. Bonds are also available as a stand-alone product.

Key Features
1. Performance bonds
Securing the performance of a contract or contractual obligation. Typically they cover 10% of a contract’s value.

2. Advance payment bonds
Guaranteeing to an employer that, in the event of a contractor breaching the contract, any payment made before the contract began can be recovered, minus any amounts certified under the contract.

3. Retention bonds
Allowing the employer to release retained monies held under a contract to the contractor to help with the contractor’s cash flow.

4. Street works bonds
Commonly required from developers of new estates, they guarantee the completion and maintenance of highways (roads and sewers), until they are adopted for public use by the local authority.