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What is a Bid Bond?

A Bid Bond is purchased when a Contractor is bidding on a tendered Contract. Bid Bonds pre-qualify the Contractor and provide security to the Employer/Owner by guaranteeing that the Contractor will enter into the Contract if it’s awarded.

We offer affordable & flexible Bid Bonds, with solutions for all segments of the civil & construction industry – from the small bakkie-builder, right up to large, national companies.


Get a Quote for Bid Bonds

Get all the benefits of our Bid Bonds:

Performance Guarantee, Construction Guarantees | Civilsure

Tender on bigger projects

Unlike Bank Bonds, we don’t require 100% collateral when issuing Bid Bonds. With cash collateral requirements of only 7–15%, our Guarantee facility allows you to free up your cashflow and tender on bigger contracts.

Ensure your tender’s success

When issuing Bid Bonds, the Guarantor/Insurer agrees to back you and become your co-principal debtor. This means you’ll then have a third-party’s professional opinion of your ability to perform, enter into and complete the project.
Bid Bonds for Building Tenders | CivilSure Construction Guarantees
Bid Bonds for Building Tenders | CivilSure Construction Guarantees

Get your tender submitted without delay

Once your initial Guarantee facility has been approved, you can be assured of a fast and seamless process when requesting Bid Bonds for all your future tenders.

Pay less tax

Both the Bid Bonds & Contingency Premiums are considered insurance expenses and are therefore deductible for company tax purposes.
Bid Bonds for Building Tenders | CivilSure Construction Guarantees
Bid Bonds for Building Tenders | CivilSure Construction Guarantees

Save for a rainy day

Your Collateral Funds (Contingency Premium), reserved by the Insurer, will earn investment income at current interest rates. Should your Bid Bonds be returned, expire, or your facility cancelled, your Contingency Premium will be returned to you, inclusive of interest earned. The Contingency fund also allows you to accrue reserves for unforeseen risks on a particular project, or to allow yourself additional capacity for future tenders.

Save time and resources

There’s no need to go in search of a supplier for your other insurance needs. We offer a full range of niche, insurance products at exceptionally competitive rates.
Bid Bonds for Building Tenders | CivilSure Construction Guarantees


What happens if the Contractor fails to enter into the contract?

In essence, Bid Bonds provide a guarantee that the Bidder (Contractor), if awarded the Contract will enter into the said agreement and furnish the prescribed Performance Bond. A cash deposit is required which is subject to full or partial forfeiture if the winning contractor fails to either execute the Contract or provide the required performance and/or Payment Bonds.

What documents should I have prepared for the application?

  • Company profile (including an organogram and copies of the current and previous contracts)
  • Two years’ financial statements and three months’ bank statements
  • Letter of appointment
  • Contract information
  • Guarantee wording requirements
  • Company registration documentation
  • Copies of all members’ identity documents and income tax numbers
  • Copy of letterhead
  • Tax clearance certificates
  • CIDB certificate

What will the Guarantor/Insurer look at when assessing my application?

All applications are subject to a thorough analysis to establish the Contractor’s risk profile. This will include an assessment of the Contractors’ financial standing and their resource capabilities to fulfill the Contract obligations.

For Corporate Clients, emphasis is placed on:

  • the financial standing of the Contractor
  • the company structure and shareholding
  • the Contract information
  • the Guarantee wording requirements
  • the securities available

we also Offer…

With your Bid Bond facility, you’ll also be eligible to apply for our other Construction Guarantees including:

Advance Payment Guarantees

When an Employer agrees to give the Contractor money upfront to pay subcontractors to complete the project, an Advance Payment Guarantee is designed to protect the sub-contractors and Employer should the Contractor suddenly go bankrupt.

Retention Guarantees

A Retention Guarantee protects the Employer by guaranteeing that the Contractor will carry out all necessary work to correct any structural defects discovered immediately after completion of the project as well as during the maintenance period.

Performance Guarantees

Building contractors are often required to provide Performance Guarantees after being awarded a contract. Performance Guarantees provide the Employer with security should the Contractor not perform his obligations or complete the work, as agreed, in the construction Contract.



Meet the experts who will guide you through the application process with ease. Our entrepreneurial clients need an insurance partner who understands the complex dynamics of the construction industry and the associated business risks. Our highly trained team offer expert advice, friendly service and products at exceptionally competitive rates.


Specialist Construction Consultant

Siphelele has a real passion for the Construction Industry. He’s able to quickly assess the needs of his clients and to expertly guide them toward choosing the correct policy. Thanks to his many years at CivilSure, he’s also able to quickly interpret and explain the ‘fine print’ in every policy.



Take a look at what some of our customers have to say.

“The CivilSure team has changed my opinion of insurance brokers. Their professionalism and expert advice has helped me find the correct cover for my project. They’re a credit to the industry. Please accept my thanks for a job well done."

~ Khumo Ntlatleng

“CivilSure offers Guarantees that are easy to understand and most importantly, cost-effective. Their client service is excellent. They found us a guarantee solution which works for our entire operation. Their top-quality service and passion puts them one step ahead."

~ Anthony Voigt


Here are a few examples of what could go wrong and cause a Bid Bond claim to trigger.

Liquidation of the Contractor

Liquidation of the Contractor’s business is one of the most common reasons for a Bid Bond to be called up. Liquidation automatically places the Contractor in default of the contract or tender and will thus trigger a claim for the Bid Bond.

The Employer needs the project to be completed and will have to arrange for a replacement Contractor and may need to put the Contract out to tender again. This causes delays and an inevitable increase in costs.

Contractor fails to provide the required Performance or Payment Guarantee

After being awarded with the Contract, if the Contractor is unable to supply the performance and/or Payment Guarantees required in the contract, the contractor will be in default and the Bid Bond will be called up.

Breach of contract by the Contractor

Eskom Holdings Soc Ltd v Hitachi Power Africa (Pty) Ltd and Another (139/2013) [2013] ZASCA 101 (12 September 2013)

Eskom presented three performance guarantees for payment – a number of disputes had arisen between the parties concerning the performance by Hitachi of its obligations under the construction contract. Eskom alleged that Hitachi had been guilty of material and ongoing breaches of the construction contract. It complained that Hitachi had delayed the completion of the first operating unit at Medupi. It also claimed that in view of the said material breaches, it was entitled to demand payment under the guarantees.



Help! What construction insurance do I need?

Understandably this can be a challenge as there is a myriad of cover available in the construction insurance landscape.

Let’s quickly unpack 5 Construction Insurance options for you.

Get your Letter of Intent almost instantly

The term ‘Letter of Intent’ (LOI) is typically used to describe a letter from an Employer to a Contractor (or from a main Contractor to a Subcontractor) indicating the Employer’s intention to enter into a formal written contract for Works described in the letter, and asking the Contractor to begin those works before the formal Contract is executed. While an Letter of Intent may come in many forms, it’s essentially a communication expressing an intention to enter into a Contract at a future date.

When is a Performance Guarantee called on?

Building Contractors often ask us the question: When is a Performance Guarantee called on? When your company starts bidding on projects for cities, provinces or municipalities, you’ll be expected to provide assurance that you can meet the obligations detailed in the Contract.

This assurance comes in the form of a Performance Guarantee. Basically, what happens is that a surety company (an insurer or bank), for a certain fee, steps in and guarantees your performance. Surety companies don’t work directly with Contractors. Instead, they partner with brokerages like us.

Four types of Contract Guarantees and What They Insure

Contract Guarantees in the construction, engineering, manufacturing and mining service industries are almost mandatory. Our range of Construction Guarantees are as varied as your requirements. Here’s a short list of the four types of Contract Guarantees and what they insure.

How do you get a Performance Guarantee?

When applying to get a Performance Guarantee, you’ll have to answer basic questions about your professional work experience and your company’s financial history. If your business has more than one owner, the financial credentials of all owners must be submitted.

What’s the difference between a Performance Bond and a Performance Guarantee?

The term Performance Bond is often misleading, which can leave contractors confused about the difference between a performance bond and a performance guarantee. Most construction Performance Bonds are actually Guarantees. Bonds and Guarantees are related but are different. The right to claim under a Guarantee is linked to non-performance of the underlying contract. Under a Bond, the bank usually pays on demand regardless of the underlying contract.

Bank Guarantee to Fuel Guarantee

A Fuel Guarantee is security against payment default by the Retailer for fuel delivered by a Fuel Company. The Guarantee covers fuel, lubricant, rent & more

What is a Performance Guarantee?

A Performance Guarantee is a contractor’s promise to complete the construction project within the deadlines, while meeting all contractual conditions.

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