1. 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?
www.astonscott.com
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?