A construction contract bond is basically an undertaking whereby the guarantor agrees to indemnify the beneficiary, to a designated amount, against loss or damage sustained by the beneficiary through the failure of the principal to perform a building contract or execute some other construction work.
A bid bond is an obligation to pay a sum as actual damages in the event that either the Contractor fails to enter the contract in accordance with its bid or fails to provide the necessary performance bonds etc as required by the Principal / Beneficiary.
A performance bond obliges the guarantor to ensure performance of the contract between the beneficiary and the principal either by arranging to complete the work or by paying money to the beneficiary.
Maintenance Bonds safeguard that the Contractor remedies any deficiencies after completing the structure of the building.
A retention bond enables the retention monies to be released to the contractor, at the same time guaranteeing the employer that in the event of default by the contractor, such monies will be paid to the employer.
An advance payment bond guarantees the principal or beneficiary in respect of funds he has advanced to the contractor to finance mobilisation and performance of the work according to the terms of the contract
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