Contractual performance bond replaces the cash deposit and obliges the insurer to pay the amount specified in the performance bond if your company fails to meet its obligations to the contractual partner.
You take part in tenders; you pursue loads of contracts. If you had to lock your cash in every tender you take part in, you would be restricting the development of your own business. Bid bonds and performance bonds issued by the insurer will replace the cash you need for other purposes. You may have to refrain from taking part in an interesting tender or executing another order.
We will propose the optimal parameters of the coverage and negotiate with the insurer. We will help you to conclude an advantageous general contract. RiskMan will select the best offer for your performance bond.
A surety bond supports and protects the contractual obligations you have entered into with a customer, supplier or partner. It is a contractual relationship between you, the surety bond company (the insurer) and the third party requiring the bond, in which insurer financially guarantees to your party that you will fulfil the terms established by the bond.
Benefit from our knowledge and the warranty market. Negotiating the terms correctly, including good rates, will make it easier to access new contracts.
A bid bond protects the owner against the losses he occurs if the construction company withdraws after being greenlighted to build the project, leaving the owner to restart the whole process of choosing a new construction company. The construction bond covers the cost of the delay as well as any new costs to be made.
Advanced payment bond it is a guarantee given when money is paid before goods or services are supplied. So, if the client agrees to make an advance payment (sometimes referred to as a down payment) to a supplier, a bond may be required to secure the payment against default by the contractor. This is referred to as an Advance Payment Bond (APB), Advance Payment Guarantee or Advance Stage Payment.
Performance bond also known as a Contract Bond, this is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor (the Principal). For example, a contractor may be required under the terms of the project, to provide a performance bond to be issued in favour of a client for whom the contractor is constructing a building.
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. As the contractor (or Sub-contractor), you get to keep your cash! These types of bonds not only aid cash flow but they also avoid the need to pursue retentions after completion of the contract.