Surety Bonds

Surety – Contract Performance and Commercial Bonds

Surety bonds are available to cover different parts or phases over the life of a construction contract. The purpose of
surety bonds are to provide the principal client (project owner) with a level of financial compensation in the event of the default or failure of a contractor under a construction contract.

There are a range of bonds available to contractors to meet a number of contract requirements include:

  • performance bonds
  • maintenance bonds
  • bid bonds
  • retention bonds
  • advance payment bonds, and
  • off-site materials bonds.

Surety bonds are designed for:

  • general builders
  • civil, heavy and specialist engineering
  • manufacturing, and
  • mining.

Contract Bonds

Set up by contractors for the benefit of their customers or potential customers (‘the principal’), Contract Bonds provide security against default or non-performance. When compared with a bank guarantee, they have the advantage of not tying up working capital or lines of credit.

Contract Bonds include:

  • Bid Bonds are submitted with a bid or tender to ensure that your client will actually enter into a contract if their bid is accepted. A Bid Bond also guarantees that a performance Bond will be supplied.
  • Performance Bondssupport the contractor's obligations during a contract period providing security to their customers against default or non-performance.
  • Advance Payment Bonds serve to secure the principal's position where funds are advanced to your client for the purposes of the pre-purchase of equipment or site establishment.
  • Retention Release Bonds provide security to the principal where funds are advanced to your client from the retention fund.
  • Maintenance Bonds secure your post-completion obligations during the warranty or latent defects period, usually 3 to 12 months post-completion.
  • Off-Site Material Bonds cover the principal in respect of goods or materials produced and held off site and paid for by them. The Off-Site Materials Bond responds where the goods or materials are not available when required for incorporation into the contract.

Commercial Bonds

Commercial Bonds cover regulations and commercial contractual obligations and include:

  • Residential Deposit Bonds provide a convenient way to secure residential (home or investment) property without having to release capital.
  • Commercial Deposit Bonds provide a convenient way to secure business (office, industrial or retail) property without having to release capital
  • Lease Performance Bonds issued at the request of a tenant in favour of their landlord and provide financial protection in lieu of a security deposit on a lease agreement.
  • Probate/Transfer Indemnity Bonds provide a fast and inexpensive way to release assets from a deceased estate without having to obtain a grant of probate.   

So call CPR Insurance Services for more information or assistance if you need to obtain any of these Bonds.

Latest News

Will you lose the value of a Broker?

If you listen to the Podcast on this link you will here Robert Cooper explain to his Accountant why Small Business stands to lose if Insurance Brokers are not there to advise start up businesses and established businesses about the risks their occupation carries and how they can deal with them. Simply because they will not want to pay the fees that would be charged. Currently instead, Insurance Companies pay the Broker after the Insurance has been placed with them. Perhaps the premiums will appear a bit cheaper in the first year? Then they will question the fees an Insurance Broker puts on top and finds they can go to the Internet and obtain the same cover at the same price. However, they will not have the constant advice and claims advocacy that comes with an Insurance Broker. The big loser is definitely the Consumer as direct insurers give absolutely no advice, only price.

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Robert Cooper - one of 100 faces of small business

This week it was announced as part of Small Business Week,  that Robert has been named one of the 100 faces of small business for a State Government promotion on the great value that small businesses play in the State of Queensland.

You can see Robert's entry here:

It is the third accolade for CPR Insurance Services in a month and after seven and a half years in business is a real pep up for the company.

For Robert, it is the culmination of many years experience, becoming well qualified, experiencing the highs and lows of a career and always wanting to contribute to his community. Sometimes, these things just come together and you receive recognition for your efforts.

Robert says that there is no doubt that starting your own business is a huge challenge, but with the right research and planning, the right people around you and a good set of values that you apply to the vision of the company, you have a very good chance of making it all succeed.

Robert says he is lucky. He has a strong supportive Wife, Mandy, who is also part of the business, along with efficient and hard working staff such as Julia McLauchlan and Aidan Harmer who are building up their own skills in a learning environment. 

However, the most important and most supportive people for CPR Insurance Services are our clients who have stuck by us and supported us over the past seven years. Our focus remains on providing the best possible service we can and always acting in their best interests. To all our clients, we say thank you!

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