Tender support
A letter issued at tender stage stating that the cover or guarantee your tender asks for is being arranged for you. It is not the policy and not the guarantee. It is the indication an employer often needs to see before the contract is awarded.
A Letter of Intent may be available following a successful preliminary assessment and is subject to insurer or approval. Whether the employer accepts it is their decision.
The letter Issued on the basis that the cover it refers to is placed through CivilSure
What it is
A Letter of Intent is a letter stating that cover for a named contract is being arranged, and what that cover is expected to be. It is issued by CivilSure as your broker, or by the insurer or guarantor, depending on what the tender requires; we confirm which when we come back to you. It is not the final policy or guarantee. It tells the employer or principal assessing your tender that cover is being arranged.
Many tenders ask for proof that insurance and, where the contract requires one, a guarantee facility will be in place before work starts. A contractor who has not yet been awarded the job has no reason to hold a policy for it. The letter fills that gap. It shows the employer you are ready to move and gives you time to put the cover the contract requires in place if it is awarded.
One letter can refer to more than one cover. The application asks which the tender requires: , a construction guarantee, public liability, , or a mix.
What it does
Where a tender asks for an indication that insurance or a guarantee facility will follow, the letter states that they are being arranged. That is often what the tender needs to see. Acceptance is the employer's decision, and some tenders require the guarantee itself.
Opening a guarantee facility typically takes 10 to 14 working days, longer if terms need negotiating. If the tender closes before the facility can be set up, the letter supports your submission while the facility is assessed.
Once the contract is signed, the guarantee wording is largely settled. Tender stage is when contractors raise the wording they want and reference it in the letter. Whether the employer accepts it is their decision, and the wording also moves the and premium on your quotation.
What it is not
A Letter of Intent is not a policy, not a guarantee and not confirmation of cover. Every application is assessed on its own facts. The insurer or guarantor may decline it or attach conditions, and nothing is in force until the policy or guarantee itself is issued. Undisclosed risk is a common reason applications are declined, so declare the project risk up front; disclosure does not guarantee approval.
How to apply
Of the three applications, letter of intent, facility and guarantee, the letter asks for the least information, so it is usually the quickest to submit and assess. Turnaround still depends on the details you send and on the insurer.
The name of the contract and a short description of the work, the contract value you are tendering for, the employer or principal, the tender or reference number, and the date the tender is expected to be awarded.
Contractors All Risk, a construction guarantee, public liability, professional indemnity, or a mix. Tell us whether you already hold a guarantee facility with us; if you do, the guarantee side moves faster.
We check the details and the facility position with the insurer or guarantor. Where they are prepared to support a letter, we issue it or forward it to you for your tender submission, and we confirm who has issued it.
The letter is issued on the basis that, if the contract is awarded, the cover it refers to is placed through CivilSure. The facility application follows if you do not yet have one, then the guarantee, and the policies the contract requires.
After the award
The letter points at what comes next. These pages explain each step.
Quick answers
No. It states that a guarantee facility, or a policy, is being arranged for the contract. The guarantee itself is issued by the guarantor after the facility is approved and the employer has approved the wording. Nothing is in force until then.
No. There is no charge for the letter. It is issued on the basis that, if the tender is awarded, the cover or guarantee it refers to is placed through CivilSure. The cover that follows carries its own costs. Insurance carries a premium. A guarantee carries a premium, admin or re-issue fees and statutory levies, and collateral held as security under your facility agreement rather than a fee, and CivilSure earns a fee for arranging and managing the facility, in addition to broker commission. Every amount is set on underwriting and shown on your quotation before you take up the cover, and you can ask us for the rand amounts in writing at any point.
Of the three applications, letter of intent, facility and guarantee, the letter asks for the least information, so it is usually the quickest to submit and assess. Turnaround still depends on the details you send and on the insurer, so apply as soon as the tender is in your hands rather than the day before it closes.
Often, where the tender asks for an indication that cover will follow. Acceptance is the employer's decision, and some tenders require the guarantee or the policy itself. Read the tender's insurance and guarantee clauses, or send them to us and we will tell you what they ask for.
No. The letter is used at tender stage precisely because the facility and the guarantee do not exist yet. If you are awarded the contract, the facility application follows, then the guarantee is drawn against it.
You can. Many contractors raise the wording at tender or appointment stage and reference it in the letter, because once the contract is signed the wording is largely settled. Whether the employer accepts it is their decision, and it also moves the collateral and premium on your quotation. We put the case to the employer and the underwriters on your behalf.
This page is a summary written in plain language. General information only. It does not constitute financial advice. What applies to you is set out in the letter itself, your facility agreement and the policy or guarantee wording.
Send the contract details through the form and a broker comes back to you. Subject to a preliminary assessment and to insurer or guarantor approval.
