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Bond Insurances - A Product Gateway
Bond Insurance and Construction Projects
In dealing with construction projects, the terms "Bonds" and "Bank Guarantees" often come up. Bonds and bank guarantees can offer different facilities, and it is important in making financial decisions that these differences can be discerned. Making the best decisions for your unique circumstances requires an understanding of the way bond insurance operates and how it can be used to achieve a variety of your financial goals as well as a sense of how bond insurances are priced, the dynamics that drive the market and the various risks involved for you whether you are a contractor or a developer. This guide, intended as an introduction to Bond Insurance for interested parties offers information on the three main types of bond insurance, as well as tips useful to making a decision on purchasing bond insurance.
What value does Bond Insurance Add
Bond Insurance adds several value-enhancing features to those who are involved in a construction project:
- With bond insurance, a principal has a backup source of payment to rely on if the contractor cannot meet his obligations.
- For the contractor, it comes at a huge cost saving in that he does not have to freeze his capital as in the case of purchasing a bank guarantee
Why would you choose a Bond Insurance from Arab Orient Insurance Co.
Essentially whether you are a Contractor or a Beneficiary such as project owner, developer, or promoter you are indeed better off having an insurance product as opposed to taking the traditional route of having a bank guarantee.
a. The bond insurance is provided by Arab Orient Insurance Company. The proven pedigree track record of Arab Orient Insurance Company backed by the strong brand identity of Al Futtaim coupled with the backing of SwissRe, the world's leading reinsurers would satisfy the comfort level of the Principals / Developers / Builders who demand a very high level of surety
b. We offer professional expertise and assistance in claims handling. If needed, we could procure substitute contractors and satisfy the main goal of the beneficiary, which is to get his project finalised.
c. A surety bond has no expiry date - unlike bank guarantees, which are always limited in time.
d. We are an additional guarantor in the beneficiary's guarantee portfolio which offers diversification effect.
Types of Bonds
Surety Bond
Performance Bond
Advance payment Bond
For more details on Bond Insurance, please e-mail to Mr. Ram Subramanian or call 04-2953425/04-2093632.
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