Performance Guarantees
It’s a promise that you’ll finish the job you signed up for.
More formally, it’s a document from us that tells your client: “This contractor will get the job done right—or you’ll get compensated.”
If you don’t deliver the work as agreed, your client gets financial coverage for their losses (up to the bond amount). It’s standard practice in construction and gives clients peace of mind you’ll stick to the deal.
In short: You build, or they’re covered.
We work with you to understand your risk landscape, and ensure that you have the best insurance cover, at the most cost-effective rates.
What It Covers?
It covers the risk of contractors non-performance. The guarantor (Insurer) will pay out to the agreed amount if the contractor fails to complete (or defaults on) the project as stated in the contract.
It provides a safety net for the employer to cover costs of delay, reworks or hiring a replacement contractor.
When Is It Used?
Performance guarantees are issued upon being awarded a contract and remain in force for the duration of the project. Most standard contracts require contractors to submit a performance guarantee within a certain amount of days after being awarded the contract.
Who Benefits?
The employer is the direct beneficiary. They receive financial cover is a contractor defaults, ensuring funds are available to complete the project.
This greatly reduces risk for the employer. Contractors do not directly benefit from this bond, however it does benefit the contractor’s cash flow. Unlike a bank guarantee, an insurer-backed bond doesn’t tie up 100% collateral, allowing contractors to preserve credit for the project’s execution. It also gives the employer a higher confidence in hiring the contractor if they have taken out this cover.