We provide the service of sourcing project bonds or guarantees to the beneficiary (employer, owner or creditor) of a project to cover the financial loss arising from the contractor (principal debtor) defaulting on his contractual obligations.
We source both insurance and bank guarantees on behalf of our clients with Insurer who have a large covering most countries in Africa as well as Australia, USA and the UK.
PRODUCT TYPES
BID BOND
Covers the employer during the bidding process, and guarantees that the bidder abides by the conditions of the tender.
ADVANCE PAYMENT GUARANTEE
Covers the employer for the prepayment of monies advanced to the contractor, usually to cover cost of capital materials and equipment and to aid cash flow.
PERFORMANCE GUARANTEE
Covers the beneficiary against the risk of the contractor not fulfilling his contractual obligations in terms of the contract.
RETENTION GUARANTEE
Replaces monies ordinarily retained by the employer until project completion. Also used to protect the employer against failure of the contractor to rectify defects after project completion.
PAYMENT GUARANTEE
Covers the supplier of goods and services against non-payment by the buyer.
MATERIALS ON-SITE / OFF-SITE GUARANTEE
Covers the employer for the value of materials stored either on or off site by the contractor. Enables payment of these materials before these materials form part of “Work Done”
FUEL GUARANTEE
Covers a bulk fuel supplier against non-payment by a fuel purchaser. Purchasers can be commercial (distributors, wholesalers, fuel station owners) or retail (airlines, mines, construction and engineering companies, or logistics companies). It serves to ease the financial burden on bulk fuel purchasers to pay for fuel upfront or incur interest expenses by acquiring funding in the banking sector to purchase fuel.
UTILITY BONDS AND GUARANTEES
Utility payment bond: Covers the principal for the deposit or payment of monthly accounts on an electricity or water account that is, should a company fail to pay their bill, Santam will pay the utility provider. Utility performance bond: Covers a state owned utility provider against the risk of the contractor not fulfilling his contractual obligations in terms of the contract.
CUSTOMS AND EXCISE BONDS
Covers businesses involved in import, export, manufacturing, sales or distribution of goods. These bonds guarantee that either taxes or duties or both will be paid by the principal when invoiced by the government. These bonds also ensure that companies comply with all legal and tax acts and requirements related to their business.