Topic

Bonds, security & insurance

Bonds, guarantees, warranties and insurance are the security behind the contract, and they lapse quietly if no one tracks them. These guides cover performance and advance payment bonds, collateral warranties, parent company guarantees and the main insurance options.

14 guides

Bonds, security & insurance

Security Who owns the materials on site when the contractor fails Title to site materials passes to the employer once their value is certified and paid. But a contractor can pass only the title it holds, and a supplier's retention of title clause can defeat the employer even after payment. 6 min read Security Security other than bonds Escrow, vesting certificates, staged payment and simply paying for less. Several cost nothing and are used far less often than bonds. 4 min read Security Bonds and guarantees down the chain The main contract has a bond, a guarantee and warranties. The packages that will actually fail have a signed order and nothing else. 4 min read Security On-demand bonds and the calls that are challenged The surety pays on presentation and questions afterwards. Courts will restrain a call only in narrow circumstances, which is why contractors resist them. 4 min read Security How a bond is actually called The process is procedural and unforgiving. Most failed calls fail on the notice, the timing or the form rather than on the entitlement. 4 min read Security Reading a bond before you accept it The wording decides everything: the trigger, the cap, the expiry and who proves what. Very few bonds are read before they are filed. 4 min read Security Latent defects insurance and the ten-year problem By the time a hidden defect appears, limitation may have run and the contractor may have dissolved. Cover has to be arranged before the work starts. 4 min read Security Professional indemnity, and why it is claims-made It responds to the claim made this year, not the advice given six years ago. That distinction decides what happens when a policy lapses. 4 min read Security Who insures the works, and until when A fire two days after practical completion and a fire two days before are the same fire with entirely different consequences for who pays. 4 min read Security Advance payment bonds and the money that goes out first Paying before the work happens reverses the normal risk of construction. The bond should reduce as the advance is recovered, and frequently does not. 4 min read Security A retention bond instead of retention The contractor keeps its money and the employer keeps its security. Almost. The gap between those two positions is the whole of the negotiation. 4 min read Security Collateral warranties and the ones nobody executes They create a contract where none existed, letting a funder or tenant sue the designer directly. Most projects have far fewer executed than the schedule suggests. 5 min read Security Parent company guarantees, and what they are worth A PCG costs nothing to give and is worth exactly as much as the parent behind it. Checking that parent is the whole exercise, and it takes twenty minutes. 4 min read Security What a performance bond actually pays out It has a cap, an expiry and a trigger, and most of the disappointment comes from the trigger. Conditional bonds are claims to be established, not forms to be filled in. 5 min read

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