Surety Bonds
What are they?
A Surety Bond is a written guarantee from an independent third party (the Surety), which is held by the Principal of a contract in lieu of a cash security deposit, bank guarantee, or a personal or corporate guarantee. The Surety is guaranteeing the contractors performance according to the terms and conditions of the contract.
How do they work?
The Surety is committed to pay the principal should the contractor fail to perform. This commitment is irrevocable and non-cancellable by the Surety. In the event of a claim the Surety will seek a 100% recovery from the contractor through a Deed of Indemnity.
Why choose a Surety Bond?
The need to provide guarantees to secure performance and other security requirements can be a major obstacle when tendering for projects. In many cases, security over assets has been pledged to a financial institution. The Surety can support further obligations without the need for further tangible security. This allows the contractor to free up funds, reduce debt facilities and can allow you to tender for additional contracts.
Why choose a Reliance Trade Credit and Surety?
Reliance Trade Credit and Surety will:
- Structure a Bond program that meets your current requirements
- Ensure that each application for a specific Bond is handled in a timely manner by the Surety
- Negotiate the Deed of Guarantee with the Surety
- Renegotiate and refine your program terms in years two and three to meet your ongoing needs
The benefits of using Reliance Trade Credit and Surety include:
- Our detailed knowledge of the market
- Our ability to structure programs
- Our analytical skills
- Our ability to work with Insurers and complement the banks
- We can help you to deliver more quality contracts