Bonds and Guarantees are required to underpin contractual performance on price, quality and timescale. These guarantees have historically been provided by a company’s own bankers, but have an adverse effect on a company’s banking lines affecting reducing working capital and frequently have to be totally cash covered.
Insurance surety companies can provide exactly the same guarantees without the need for cash cover leaving banking line free to run the business on a day to day basis.
Type of Bonds
Performance
Either Conditional or On Demand.
Conditional Bonds guarantee price, quality and time scale as laid out in the contract.
On Demand can be called on for any reason.
