Bonds security for your contract
We offer the following types of bonds:
A bid bond is a type of construction bond that protects the owner or developer in a construction bidding process. It is a guarantee that you, as the bidder, provide to the project owner to ensure that if you fail to honor the terms of the bid, the owner will be compensated. A bid bond is typically obtained through a surety agency, such as an insurance company or bank, and it helps guarantee that a contractor is financially stable and has the necessary resources to take on a project.
A performance bond is issued to one party of a contract as a guarantee against the failure of the other party to meet obligations specified in the contract. It is also referred to as a contract bond. A performance bond is usually provided by a bank or an insurance company to make sure a contractor completes designated projects.
The purpose of Retention is to ensure the contractor properly completes the works required under the contract. In some contracts, the client (the Obligee) may hold between 2.5% and 5% of the contract value (Retention Monies) for up to 6 – 24 months. This period of time is called the Defects Liability Period where you, the contractor (and Principal), will have to remedy defects. This means you will have to wait until the end of the Defects Liability Period to receive your 2.5% – 5% of contract value. This may therefore have a negative effect on your cash flow. In this case, with a view to freeing up cash flow, we can offer a Retention Bond as an alternative solution.
Mobilization Advance bond is required by the project owner to ensure that the funds which have been advanced to the contractor will be properly utilized for the project work only. This guarantee covers the un-recovered amount of the bond by the project owner which has not been adjusted by the contractor or the bond value whichever is lower. Mobilization Advance Bonds are usually issued from the commencement of the project and not on the running projects.
A bond required that guarantees the payment of duties or taxes due by law on all goods directly or indirectly imported or exported to or from the country as well as the reporting of statistical data relating to the shipments involved. The bond may be issued on either a single or a continuous form.
Documentation Required for Assessment
A bond is not an insurance policy but a financial product and as such requires assessment of both the bond applicant and financial statements.
The list of documents below are required to make a complete and reasonable assessment of the bond risk:
- Completed Applicant Form (no ticks or blanks accepted)
- Financial Statements
- Audited Accounts for last three (3) years for an existing company
- Projected Accounts for a new company
- Specimen of Bond wording
Note: *Additional information may be requested.
Upon approval you will be advised of additional documents that will be required.
Requirements from Applicant Upon Approval
- Corporate Counter Indemnity from the Insured / Director
- Two (2) forms of identification of Directors and Shareholders
- Utility bill within the last 3 months
- Payment of Premiums
- The CAR/EAR Insurance where applicable
- Latest Annual Return of Directors
- Articles of Incorporation
- Certificate of Incorporation or Continuance
- Reference letter from foreign bank (for foreign customers only)
- PEP Declaration Form
- Source of Funds (if required)
- Company Profile including Organizational Chart
