Perkins Slade (independent insurance brokers)

The placement of a bond or guarantee through the surety market as an alternative to bank overdrafts can be beneficial to keep bank facilities available to meet a company's cash flow requirements. They are written promises to pay for the direct loss and damage suffered by a third party, the beneficiary of the bond. They are issued to protect the beneficiary against breach of contractual obligations by the client.

Many types of bond and guarantees are available, for almost any area of risk, subject to the underlying security and risk being acceptable to the guarantor. They can be offered on a one-off or regular basis at more competitive rates.

Performance Bonds

An indemnity, usually between 10% and 20% of a contract value, to an employer against loss or damage in the event of a contractor or supplier failing to perform the terms of the contract. These will be more familiar to the construction or service industry sector.

Road & Sewer Bonds

A guarantee on behalf of a property developer or house builder, that it will complete the roads and sewers to enable them to be adopted by the appropriate local authority under the relevant Highways Act or Water Industry Acts.

Duty Deferment / Custom Bonds

Duty and VAT are payable immediately upon importation into the UK at the point of entry. This Bond allows any company that imports goods from outside of the EU the flexibility to defer payment for a given period. This deferment period provides a very real cash flow advantage to these companies.

Reinstatement Bonds

This is a bond usually issued in favour of a local authority or the Environmental Agency, which guarantees the restoration of land to agreed standards after work, such as quarrying, open cast mining or waste disposal, has been completed.

Advance / Stage Payment Bonds

This is a guarantee in favour of a customer to provide security for monies which have been paid in advance of the goods or services being provided. This would suit companies of limited liability trading status, particularly those in the engineering sector.

Travel Bonds

These bonds are provided to meet the statutory requirements of the relevant regulatory authority and the membership stipulations of the various travel trade associations to protect members of the public against the financial failure of the operating company. This would suit tour operators, travel agents and coach operators in the ABTA, CAA, IATA, Confederation of Passenger Transport and the Passenger Transport Association sector.