Bank Bonds vs Insurer Bonds – which is right for your project?

 

The options

When it comes to securing a bond, construction businesses often have two main options: bank-issued bonds or insurer-issued bonds. While both provide the necessary financial guarantees, their implications for working capital, cost, and flexibility are very different.

 

Construction Insurance

 

Why choose Verlingue when it comes to insurer bonds

• We help clients weigh up these options based on the nature of their projects, financial position, and strategic goals
• Our strong relationships with leading surety insurers mean we can arrange insurer-backed bonds quickly, efficiently, and at competitive rates—without tying up your cash flow.

Let us help you secure the right support for your next project—so you can build with confidence, not constraint.

Working capital impact

Bank Bonds typically require cash collateral or reduction in overdraft facilities. This ties up capital that could otherwise be used to fund project delivery or growth.Insurer Bonds on the other hand usually require no cash cover, helping to preserve your cash flow and working capital.

 

Cost considerations

Bank Bonds often come with arrangement fees and administrative charges. Insurer Bonds are generally less expensive, typically requiring only an annual premium for the duration of the bond. This makes insurer bonds a leaner solution for cost-conscious businesses.

 

Flexibility and support

Not all banks are bond specialists and may take a rigid approach to terms and issuance timelines. Insurers on the other hand, often have teams who specialise in bond wording and structure, offering expert advice that adds value. For businesses seeking a more consultative and supportive experience, insurer bonds could be the answer.