A bond is a legally-enforceable financial guarantee given by a third party (the guarantor) to a purchaser (the client). It guarantees the obligations of a supplier of goods, works or services (the contractor) under a contract. The guarantor agrees to pay the client a sum of money if the contractor defaults on their obligations. The purpose of a bond is to help the client meet the extra expenses to remedy the default and/or complete the contract. There are several types of bond that Alan Boswell Group can arrange including:
With access to all underwriters in the market, we are able to offer you a full broking service to find the best solution for your needs then help you get started, remaining om hand to provide advice and support throughout the policy period including a full claims management service.
Performance bonds – Performance bonds provide our clients with a financial guarantee to fulfil the performance of their contracts where there is a chance that financial constraints may lead to the construction company becoming insolvent and failing to complete the contracted works.
NHBC bonds – This is a specific type of performance bond required by the NHBC when new companies register with them to cover NHBC Guarantees.
Bid bonds – Bid bonds guarantee the performance of the contractor in the event that they win a tender.
Retention bonds – Contractors can offer retention bonds to employers to get them to reduce the amount of retention required under the contract.
Advance payment bonds – These bonds cover employers who want to make a payment to a contractor to purchase materials in advance but are concerned that if the contractor becomes insolvent during this time they will lose their money.
Section 38 and 104 bonds – These are highways and sewer bonds required by local authorities.
Rent guarantees – Landlords, both residential and commercial, are always dependent on the ability and willingness of their tenants to pay. Our rent guarantee insurance not only ensures payment but also provides covenant enhancement thus increasing the value of the property.
Deposit guarantees (tenants) – We can provide bonds in lieu of tenant deposit.
Bespoke surety products – There are many other types of bonds we can offer.
Our guide covers the definition of commercial combined insurance, what is covered within these policies and the risks of not having cover in place.