Guarantees

HW Brokers via their strategic alliances and long term relationships with insurers are well positioned to offer a number of guarantee options to fulfil an ever increasing demand from employers to minimize risk.

 

Guarantees include but are not limited to:

 

Bid Bonds or Letter of Intent

Firstly bid bonds are required in connection with the submission of tenders of contracts with the public authorities and or private owners. The object is to guarantee that the Bidder (Contractor), if awarded the Contract will enter into the said agreement and furnish the prescribed Performance Bond.

 

Performance Guarantees

A Performance Bond is required of a Contractor to guarantee the full and due performance of the Contract according to plans and specifications.

 

Maintenance Guarantees

The normal coverage provided by a Maintenance Bond is a guarantee against defective workmanship or materials after completion. However, Maintenance Bonds sometimes incorporate an obligation guaranteeing "efficient or successful operation "or other obligations of like intent and purpose. These maintenance guarantees are also admitted in place of the retainer of up to 10%.

 

Retention Monies Guarantees

In essence this type of Bond is similar to the Maintenance Bond and basically covers the same parameters.

 

Advance Payment Guarantees

This type of Construction Bond is mainly utilized for construction sites outside of South Africa. This type of Construction Bond would be issued in the case where the Employer is pre-financing a Contractor by advance payment on the Contract; he may secure the repayment of the advance using this bond.

The amount guaranteed should decrease in accordance with the portions of work performed. Usually this is reflected by a fixed percentage in the monthly bills. These are only issued in connection with Performance Guarantees.

 

Supplier Surety (Construction industry only)

There is an increasing demand for supplier guarantees within the construction industry e.g., provision of steel and building material to contractors and other players in the industry. Credit insurance policies are currently available in the market for buyers only and not for suppliers.