Construction Bond: How to get one and what will it cost?

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Also referred to as Performance Bond, Builders Bond, Contract Bond & Surety Bond.

I need a bond for an upcoming contract, where can I get one?

Martin Insurance Brokers (as part of Martin Insurance Ltd – est 1980) work with a panel of underwriters who provide these bonds.

Will my company be able to get a bond?

That depends on a number of factors including:

  • The financial results of the company over the past number of years. (is it making profits or losses)
  • How much retained profit (or losses) are built up in the company since it was established.
  • Other security available?
  • How large is the required bond?
  • A wide range of other factors which will be taken into account by the underwriter.

How much will the bond cost?

For performance bonds the most common rate is circa 1% of the contract value. Although that rate can increase or reduce substantially depending on the financial information presented.

What is the process and how long will it take to get a bond?

  • Submit your company accounts and some other forms including a bank information form (which must be completed by your bank).
  • You must have up to date audited accounts available – normally no more than 12 months old.
  • Underwriters will normally respond within 24-48 hours. They may provide an immediate quotation or request more information.
  • Once a quote has been provided, a draft wording will be issued and this is sent to your client for approval.
  • The bond will be issued once the client has confirmed they are happy with the draft wording. Also the premium must be paid upfront.

The process normally takes at least a week. The biggest delays are often with the bank information form and because there are no up-to-date audited accounts available.

Who do I contact?

If you would like a quotation, please call us on 049-4332944, e-mail or complete our online enquiry form.

Disclaimer: The material contained is this article is for general information purposes only and does not constitute professional advice.

James Martin
James Martin
James Martin has 16 years of experience as a general insurance broker. He is a member of the Chartered Insurance Institute and has completed a Diploma in Corporate Finance.

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