Getting to know how to use bonds is critical for any business that is planning to work with the public sector, especially on construction projects. The risks – all the more when working overseas – are always high. Many projects are affected by unforeseen events, from weather to the failure of a supplier or delays in delivery of essential materials.
The purpose of a bond is to reduce the uncertainty and bring security to the financial aspects of the contract so that all parties can be on good terms and the project is completed. A Performance Bond is provided by the contractor to the developer, covering the damages your customer may suffer if you (as the contractor) cannot deliver on your side of the deal. A Payment Bond protects workers, material suppliers and subcontractors against non-payment. Both of these types of bond are essential to win public contracts.
Other types of bond can be used to help your business win and benefit from significant contracts with the public sector. For example, an advance payment bond will secure any monies paid by the contractor before work begins. A bid bond protects the project's owner if the bid is not honoured. In many public sector contracts a bid, payment and performance bond may be required by law.
We have worldwide experience of working with bonds in construction, manufacturing and other sectors where public sector contractors are placed. With our understanding of the dynamics of trade and the fine detail of bond management across the world, we take those simple principles and build agreements that are tailored for your needs.
Your business partners may request guarantees before they will trade with you. You can rely on us to help you build lasting and successful business partnerships with confidence. When you take our bonding cover, we are an independent guarantor and take on the liability for you. Our bonds and guarantees have a high standing based on an AA- rating from Standard & Poor's. Our correspondents around the world will use their market knowledge to help you analyse risks and put in place the protection you need. We will propose the best bond or guarantee after careful analysis and consideration of your business and the requirements of any contract you are bidding for. You can rely on us to establish the guarantees your business trading requires for international markets and to gain the trust of your business partners in markets around the world.