Our Services
Performance Guarantees
Bid Bonds
Bid Bonds are provided to a Principal on behalf of a client at the time of tendering. Should a client be awarded the contract for which he tendered and then for some reason not start the contract, the Principal would be entitled to call up the Bid Bond to cover the costs of re-awarding the contract, possibly even putting the job out for re-tender.
Performance Bonds
Performance Bonds are issued in favour of a Principal securing the efficient and final performance of the contractor.
Advance Payment Bonds
The Principal advances certain monies to the contractor for work to be completed. The guarantee assures the Principal that the monies will be repaid by the contractor. This guarantee reduces and is set off against payment certificates.
Retention Money Bonds
During the period of any contract, the Principal generally retains up to 10% (in some instances 5%) of the value of every payment made to the client, as retention monies, to cover any remedial work that may be required during the maintenance period if the Contractor fails to complete the work. This retention limits the cashflow of the client. To address this, we would provide a guarantee to the Principal and the Principal would be entitled to call on the guarantee in the event that the client did not fulfil its obligations in terms of that which needed to be completed.
Development and Reticulation Bonds
These bonds are used in respect of the development of a township. A township developer is often obliged to deposit with a Town Council an amount of money for the supply and installation of water and reticulation, or electrical installation.
Maintenance Bonds
These bonds cover the maintenance period after completion of the contract for any remedial/maintenance work not attended to by the contractor due to the contractor’s default or liquidation.
Unused Materials on Site Bonds
Prior to any materials being delivered to site or constructed into the works, the contractor should obtain payment for the materials from the Principal. In the event of the contractor not delivering the materials to site or not building the materials into the works, the Principal could call on the guarantee. Our guarantee would not cover theft or damage to the materials.
Solvency Guarantees
Customs and Excise General Bonds
In the event that a client enters into an agreement with the Department of Customs and Excise for the deferment of liability on imported goods, payment of such deferment duty must be secured by a guarantee.
Customs Rebate Bonds
These bonds are issued to guarantee that goods are acquired under rebate of duty and are used in the industry for the specific purpose for which the rebate was issued.
Warehouse Bonds
These bonds guarantee that the Principal is the occupier of certain warehouses for the storage of bonded goods and that these goods shall be duly exported.
Electricity Deposit Guarantees
These guarantees are furnished to a Principal to stand in lieu of a cash deposit required for an electricity account.
Mining Rehabilitation Guarantees
When a Mining Company applies for a mining licence in respect of a specific mine, part of the approval process to be followed is the lodgement of an Environmental Management Programme Report (EMPR) (produced by an external Professional) with the Department of Mineral Resources (DMR). Apart from all the other factors, the EMPR report sets out how the Mining Company intends to handle the rehabilitation aspect of the mine/s, once it has completed its mining activities.
Included in the EMPR are the approximate costings relating to the rehabilitation of the mine.
For the mining house to make provision for the mining rehabilitation costs as per the EMPR, the following options are available:
to deposit a stipulated amount upfront with the DMR prior to the provision of the mining licence,
or
provide a bank guarantee prior to the provision of the mining licence.
To optimise the Mining Company’s cash holdings and provide an alternative solution to these options, Insurance Companies in South Africa developed a product to issue to the DMR.
Educational Guarantees
What is an Educational Guarantee/Educational Surety?
Also known as Student Fee Protection Guarantees. In terms of a training institution registration requirements with the Department of Education (DOE), institutions have to lodge a guarantee with the DOE confirming that if an institution is unable to render a course to a student after he/she has paid for the course, the student has the right to approach the DOE which will thereafter call on the guarantee and reimburse the students. This type of guarantee is provided on behalf of the training institutions.
NHBRC Guarantees
What is an NHBRC Late Enrolment Guarantee?
The law requires all Home Builders to enrol every new home with the National Home Builders Registration Council (NHBRC). Irrespective of selling price, all new homes must be enrolled fifteen (15) days before construction commences. Failure to enrol may result in the Home Builder having to supply the NHBRC with a Bank or Insurance Late Enrolment Guarantee.
Prior to February 2013, Bank Guarantees with 100% Cash Collateral were the only Guarantees accepted by the NHBRC. In February 2013, the NHBRC amended its requirements and now accepts Guarantees from either Banks or Insurance Companies.
Benefits of an NHBRC Guarantee
No freezing of cash assets
Reduced paperwork
No financial statements required
Affordable once-off premium payment
