loader image
Try The Pricing Tool
Get A Letter Of Intent
Get Letter Of Intent
Get Letter Of Intent
Get Letter Of Intent

Four types of Contract Guarantees and What They Insure

Guarantees

Four types of Contract Guarantees and What They Insure

Aug 23, 2018 | Guarantees

3 min read
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:

Performance Guarantees

A performance guarantee provides a guarantee that Contractors will adhere to the terms of their Contract, such as completing the project on time and within budget.

Bid Bonds

A bid bond provides a guarantee that if you bid on a project and are awarded the Contract, you’ll honour the terms of your bid and sign all the Contracts related to the project.
Four types of Contract Guarantees and What They Insure

Advance Payment Guarantees

An advance payment guarantee is a guarantee to your Subcontractors and suppliers that you will pay them for services and materials they provide to you for the duration of the project. This guarantee protects Subcontractors from cash-strapped Contractors who allocate all their funds to honouring their building Contract, while failing to pay their Subcontractors and suppliers.

Retention Guarantees

A retention guarantee is a guarantee to replace the retention fund (usually held by the Employer) which is used to fix defects during the final completion of a Contract. This guarantee lets the Contactor free up retention funds whilst giving the Employer security to pay for defects should the Contractor not complete the project properly.

How to Apply for Contract Guarantees

If you need any of these Contract Guarantees, we can help, just complete this form to get started.

The information contained in this article is provided for general information and educational purposes only and does not constitute financial advice as defined in the Financial Advisory and Intermediary Services Act, 37 of 2002 (“FAIS”). Readers should not act solely on the basis of the material contained herein without seeking professional advice from a licensed financial services provider who has considered their specific needs, objectives, and circumstances.

CivilSure, a division of i-Tribe (Pty) Ltd, is an authorised Financial Services Provider (FSP 49912), licensed for Short-Term Insurance.

Categories

Archives

WhatsApp Us