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At Global Home Warranties, we arrange a variety of construction performance bonds through an established network of experienced professionals.
We offer a competitive, efficient service that is tailored to individual project requirements. We have a team of experts who can provide solutions for house builders, developers, contractors, and housing associations. We work alongside our partner network to provide solutions with low security where possible. This avoids the need for deposits or personal guarantees which means essential working capital is not tied up for long periods of time.
The Surety
Insurer (sometimes called the Guarantor)
The Contractor
is the contractor who undertakes the services under the contract
The Beneficiary
is the party who receives the services and will receive payment under the bond if the Contractor fails to perform
Who is involved in a Construction performance bond?
Surety: The insurer (also referred to as Guarantor). The party who will make payment should the contractor fail to meet their contractual obligations.
Contractor: The contractor who undertakes the services under the contract.
Beneficiary: The party who receives the services and the payment under the performance bond should the contractor fail to perform.
What is a Construction Performance Bond?
A Construction Performance Bond is a guarantee, typically with a value of 10% of the contract price (though this may vary in some cases). It is intended to shield the employer/beneficiary from any losses and/or damages incurred as a result of the contractor's inability to fulfill its contractual obligations.
They are a protective measure in the form of a written guarantee which pays for the direct loss or damage suffered by a third party when a contractor fails to meet their obligations.
As well as Construction Performance Bonds, we can also arrange:
Road Bond, Water Bond, Sewer Bond
These bonds guarantee that a local authority or water company will be provided with a road, footpath, street lighting, or sewer system that meets their standards.
Advanced Payment Bond
An advance payment bond is a guarantee, supplied by the party receiving an advance payment, to the party advancing the payment. It provides that the advanced sum will be returned if the agreement under which the advance was made cannot be fulfilled.
Retention Bonds
An employer could hold up to 5% of the contract value for a period of up to 12 months. The main contractor or sub-contractor then must wait for the funds to be returned at the end of the making good of defect period and this can affect cash flow. A retention bond will provide the employer with the same level of comfort as the retention. The contractor/ sub contractor has the real benefit of retaining the cash in their account.
Planning your next UK construction project? If have any questions or would like to arrange a bond, get in touch with our performance bonds team.
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