How Performance Bonds Protect Housing Associations
There are many benefits of Performance Bonds to Main Contractors, but there are also benefits for Housing Associations. Performance Bonds provide additional financial protection to Housing Associations for the work that appointed Main Contractors undertake on their behalf.
This article will discuss how Performance Bonds protect Housing Associations, and how CG Bonds can secure Performance Bonds on Social Housing Schemes.
Protection For Housing Associations With Performance Bonds
Performance bonds offer housing associations added financial protection in the event of contractor default, such as a breach of contract or insolvency.
Protection Against Default
In the event of contractor default or insolvency, a Performance Bond can be called upon to provide the financial compensation required by the Housing Association.
Financial Security
Performance Bonds offer financial security to Housing Associations as they represent a sum of money that can address the consequences of the contractor’s default. The Performance Bond typically represents around 10% of the contract value.
Risk Mitigation
Performance bonds help mitigate the risks associated with contractor insolvency or non-performance, safeguarding the housing association’s investment and the public purse.
When May Performance Bonds Be Called Upon?
There are a number of circumstances where a Housing Association may need to call upon a Performance Bond to ensure the project is completed. These situations include:
- If the contractor becomes insolvent.
- If the contractor fails to complete the work to an acceptable standard.
- If the contractor breaches the contract.
What Are the Advantages of Performance Bonds?
Performance Bonds offer key advantages to Housing Associations by mitigating risk and providing financial protection. For contractors, obtaining a Performance Bond can boost client confidence and enhance their credibility within the industry, as it signals financial stability and a strong commitment to fulfilling contractual obligations.
Performance Bonds and More From CG Bonds
To obtain a Performance Bonds from CG Bonds Surety, our dedicated client account management team is here to support you every step of the way. To kick-start the application process, we will ask for the following essential information:
- Completed and Signed Application Form
- Most Recent Audited Financial Accounts
- Copy of Performance Bonds Wording (if available)
Contact CG Bonds to enquire about Performance Bonds today!
The information provided in this blog is not intended to constitute legal advice or any other advice of a professional nature. The recipient of this information contained in this blog should always consult legal or professional advice.
