Provides assurance of project completion by capable & qualified contractors.
A performance bond is a guarantee which protects an employer against losses or damages sustained as a result of a contractor or supplier failing to perform its contractual obligations.
They are generally found in the construction and service industries.
Coface as a Surety provider is in a position to offer conditionally worded performance bonds to clients with employers. A conditionally worded bond can be called if there is a serious breach under the contract, and bond calls are usually due to the insolvency of the contractor.
Underwriting criteria
- Clients should be well established and have been trading for at least 4 years
- The company should be profitable and, ideally, have been so during the last 2 years
- Availability of last 2 years fully audited accounts and up-to-date management accounts
- Coface may wish to undertake an underwriting visit
- A Coface general company information form, bond request form and bank information form will need to be completed
- You will need to provide a copy of the bond wording
Security
As the Surety provider, we may seek reimbursement from a client for any claim paid under a bond.
A counter indemnity is standard security in the surety market and provides the Surety with a legally binding undertaking from the contractor to indemnify against any claims and costs that may arise whilst acting as Surety for that particular client.
Charges, one-off bonds & uncommitted facilities
Depending on the risk involved, we will provide a competitive premium rate. Coface will consider one-off bond requests and also uncommitted facilities.
