Four types of Contract Guarantees and What They Insure
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.
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.
In situations where the Employer agrees to pay a Contractor up front, an Advance Payment Guarantee may be required. For example: where a Contractor has to incur significant expenses before construction begins by purchasing project-specific equipment, materials or Plant.
This guarantee protect the Employer’s investment by securing the payment against default by the Contractor and also bind the Contractor to use the advance payment for the purpose stated in the contract.
A retention guarantee is typically issued to the Employer (or main contractor) towards the end of a contract. A Retention Guarantee protects the Employer by ensuring that the building contractor or subcontractors, will continue to fulfil their contractual obligations when their final payment is withdrawn ahead of the maintenance period.
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 LEGAL STUFF
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