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What is a Performance Guarantee?

by | Sep 4, 2014 | Guarantees | 0 comments

Performance Guarantee, What is a Performance Guarantee? | CivilSure

A Performance Guarantee is a contractors promise to complete the project undertaken. To further elaborate, a Performance Guarantee is a document that legally confirms that you, the contractor will complete the contract you have undertaken.

A Performance Guarantee is issued by an insurance company or bank to an employer on behalf of the contractor to guarantee the full and due performance of the works by the contractor as set out in the contract data.

Performance Guarantees give the contract employer confidence that they will meet their projected deadlines and have their contracts completed.

In other words, should the contractor fail to construct the building according to the specifications laid out by the contract, the client is guaranteed compensation for any monetary losses up to the amount of the performance bond.

Summary of Performance guarantee;

Protects the Employer/Principal against the risk of the contractor failing to comply with the conditions of the contract set up between the Employer & Contractor.

Benefits Performance guarantee;

Give the Employer/Principal confidence that the contractor will complete the works and therefore makes them more appealing in the tendering process.

How to qualify for a Performance guarantee;

You will only need to set up your facility once, but you will need to apply for an individual guarantee for each and every contract undertaken.

To Speak to a consultant, please call our Toll Free Number: 080 777 777 1.

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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.

Contractors All Risk

Cover provided by Contract Works Coupon
Building contract risks, civil contract risk, contract works, contractor’s all risk, demolition all risks, dismantling all risks, erection all risks and workers damage.

Period of Insurance
The period of insurance of a Sasria construction risk coupon may be either 12 consecutive months, or from the inception date of the specific contract until completion of the contract, which may be shorter or longer than 12 consecutive
calendar months.

Sum Insured
Underlying policy Sum Insured and all additional covers.

Specific Contracts
Adjusted at the end of the period of insurance.

Period of Insurance

Extension

  • Sasria period of insurance may be extended if the underlying policy is extended.

• An additional premium in terms of the Sasria cover must also be charged using the same method of calculation.

Additional covers

• CPC

• Additonal storage

• Professional fees

• Employees personal effects on employer’s policy

Sasria Policy Wording

We always want to keep you informed of all market or regulatory changes and updates that
have an impact on our business. Therefore, we're pleased to let you know that the Sasria Contract Works
policy wording has been simplified and is now available in plain language.

CALL US ON 080 777 777 1

Contractors All Risk

Cover provided by Contract Works Coupon
Building contract risks, civil contract risk, contract works, contractor’s all risk, demolition all risks, dismantling all risks, erection all risks and workers damage.

Period of Insurance
The period of insurance of a Sasria construction risk coupon may be either 12 consecutive months, or from the inception date of the specific contract until completion of the contract, which may be shorter or longer than 12 consecutive
calendar months.

Sum Insured
Underlying policy Sum Insured and all additional covers.

Specific Contracts
Adjusted at the end of the period of insurance.

Period of Insurance

Extension

  • Sasria period of insurance may be extended if the underlying policy is extended.

• An additional premium in terms of the Sasria cover must also be charged using the same method of calculation.

Additional covers

• CPC

• Additonal storage

• Professional fees

• Employees personal effects on employer’s policy

Sasria Policy Wording

We always want to keep you informed of all market or regulatory changes and updates that
have an impact on our business. Therefore, we're pleased to let you know that the Sasria Contract Works
policy wording has been simplified and is now available in plain language.
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