Insurance Products
Surety Bonds
Don’t let retentions tie up capital that you need for cashflow and running the project, leverage surety bonds instead
What is it?
Construction contracts typically require the contractor to put up a bond of 5% of the construction value.
This can be achieved by their taking out a bank guarantee or an insurance bond.
Insurance bonds differ from bank guarantees in that they do not require security.
Similarly, developers/owners may be required by local councils to put up a bond prior to undertaking a project and these can be affected in a similar way.
Why?
This is a contractual requirement. An insurance bond is an advantageous way of complying with this requirement due to the bond not being secured.
Who needs it?
Any party who is required to provide a bond relating to a project.
This will typically include principals/owners and contractors.
What are some examples?
Example 1
A local council requires a developer to affect a bond prior to it being able to undertake development.
An insurance bond will satisfy this requirement and will not require that the developer provide security for the amount of the bond.
Example 2
A contract is required by a principal to affect a bond prior to commencing a construction project.
An insurance bond will satisfy this requirement and will not require that the contractor provide security for the amount of the bond.
How can I purchase it?
Every client is different, that’s why our insurance service is custom designed for your needs. Click on ‘Contact us’ and you can book a meeting with Cruden Read to determine the most effective and appropriate solution.