Performance Bond Overview:
Performance bonds are commonly used to protect the developers’ interest in a project. It is provided to guarantee against any failure of the other party in meeting their obligations which are specified in the contract. We have a broad network of A rated bond providers that allows us to deliver facilities on various projects for our clients. A performance bond has several benefits:
- Protection in the event that the contractor fails to meet their contractual obligations
- The owner of a project is assured of the completion of the project
- Mitigates the owners risk of incurring additional costs
- Real alternative to bank bonds and escrows
- Protects developer funds
- Offers comfort for the funders while delivering assurance of project completion
Jack Richards, one of our Senior Brokers was approached by a client of his, Mercer Building Solutions with a requirement for a performance bond on a £6.1m project that they had won with a Housing Association. The client had already received terms, however, these were from an unrated provider who were requesting personal guarantees. Jack approached a number of A rated markets from our panel and secured terms at 7% of the bond value, a very competitive rate when compared with the usual rate of around 10% of the bond value. We were also able to remove the requirement for personal guarantees with just the standard indemnities required.
The client will be starting on site in 3 weeks’ time and the performance bond will be placed in line with this, without concern, with a happy Housing Association and at a competitive price. We are now in the process of placing another performance bond for the same client due to the high level of service that Jack provided.
Testimonial from the client:
We had recently just won our biggest job which would have put the company into the next stage of our development and growth, but found it increasingly difficult to obtain a performance bond for the scheme with our current insurance broker. We approached London Belgravia Brokers, as they had a specialism and expertise in this field and they found us a competitive performance bond in terms of premium and terms. Working with them is painless and hassle free and we will now be using them for all of our performance bond needs moving forward, due to their knowledge of the market.
If a performance bond is something that you require then do not hesitate to get in contact with us and one of our brokers will gladly assist you in securing a competitive, hassle free quote. London Belgravia Brokers are experts in specialist risk insurance products for property developers and in addition to performance bonds we can also provide building warranties. Our team has in excess of 40 years’ experience in the sector, obtaining specialist property insurance.
0203 701 0422