Performance bonds? Why use them?Many contractors and sub - contractors rely on their bank to provide construction bonds and financial guarantees. Unfortunately banks generally require real assets as security or reduce the contractors banking facilities in return for surety provision. This can lead to reduced working capital and restrict the ability to secure new contracts, with funds being tied up supporting bank surety requirements.

A contract guarantee bond will still be subject to certain terms and conditions, but will cover all ABI or similar bond types. This will afford contractors rate certainty at tender stage and save time administratively, allowing cost to be passed to the beneficiary quickly and accurately.

A contract guarantee bond provides an alternative form of financial guarantee to support construction related contracts. There are many different types of bond to suit the numerous different financial obligations that can be placed on contractors or sub-contractors as part of their business. They are an alternative solution to bank-provided guarantees, provided by surety or insurance companies.

Types of bond:

Guide to Contract Guarantee Bonds

Commercial Insurance │ Private Client Insurance │ Risk Management

Want to know more?

Robert Parker

robertparker@astonscott.com

020 8643 7575

Ben Hicks

benhicks@astonscott.com

020 8643 7575

www.astonscott.com

Aston Scott Group combines the commercial insurance skills of Aston Scott Ltd with the risk management expertise of ASG Risk Management Ltd. Aston Scott Group plc is registered in England and Wales, No. 5639290. Registered office: Malling House, West Malling, Kent, ME19 6QL. Aston Scott Ltd is authorised and regulated by the Financial Conduct Authority (Reg No. 308048).

What is a contract guarantee bond?

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Performance bonds:A financial guarantee linked to completion of a project. These can be arranged on an individual or agreed limit / facility basis.Retention bonds:An alternative to your main contractor withholding a percentage of the contract value.

Road and sewer bonds:These bonds guarantee the completion of roads and sewers to enable them to be adopted by the relevant authority (e.g. Sections 38,104,106 & 278 agreements.

Advance payment bonds:A guarantee against deposits in advance of receipt of goods or services if a contract cannot be fulfilled.10 year warranties: Providing your clients with protection against latent defects. Can be extended to 12 years for contracts under seal .

Aston Scott has a real understanding of the construction industry and the contractual guarantees required of them by their employers. We work only with surety and insurance companies that provide the appropriate levels of financial security for your needs.

Why Aston Scott?