Who needs guarantees? In the construction industry guarantees are mostly required by project owners and main contractors to ensure that the Contractor is qualified to perform the contract and that the project will be completed in accordance with the contract documents

Types of Guarantees:

• Bid bonds and Letters of intent

• Performance Guarantees

• Maintenance Guarantees

• Advance payment  / Materials offsite Guarantees

• Retention Money guarantees

• Customs and Excise Bonds

Maintenance Guarantees

The normal coverage provided by a Maintenance Bond is a guarantee against defective workmanship or materials after completion.

Retention Guarantee / Bond

These bonds effectively replace the actual retention fund. Most contracts make an allowance for the Employer/ Principal to retain a percentage of the funds payable to the contractor during the construction period as a form of security against default or defective work.

Advance Payment Guarantee / Bond

Some contracts make provision for Employers / Beneficiaries to pre-finance a contractor by making payments before commencement of the contract. The Employer / Beneficiary secure such a risk by acquiring an advance payment guarantee / bond in return.

Materials on/offsite

This bond is issued to compensate the Employer for all losses, damages and expenses that may be suffered or incurred by the Employer as a result of the Employer making payment for any materials to be held off/on Site

Customs Bonds and Excise Bonds A Customs and Excise Bond is a guarantee which provides the relevant security to protect a government department, normally SARS, against the failure of an enterprise to pay taxes and customs duties.

• Life cover
• Disability
• Dread disease
• Pension funds
• Provident funds
• Medical aid
• GAP cover
• Investments