Construction Guarantees Insurance
Broker Directory Article
Construction Guarantees in South Africa
Construction Guarantees are frequently issued in construction agreements to ensure that the employer is safeguarded in the event that the contractor causes a delay, or a disruption, in the completion of the works.
A Construction Guarantee is just like a 'Letter of Credit', or written undertaking.
|Various types of Construction Guarantees exist, namely:|
|From the above it is clear that Construction Guarantees are all about 'reducing the risks' for employers (or owners), of construction projects.
Risks - A quick summary of some of the risks are: The contractor's ability to finish the job; Adequate access to capital; Work alongside employer management; Pricing and costing done up-front is correct; Have the skill-set to manage, deploy and complete the contract.
Product wordings may differ and some employers may expect unfair contract terms. The 3 parties to the contract, namely the Employer, the Contractor and the Guarantor, should all be protected fairly.
Some leading insurers and underwriting managers offer these specialist products. Therefore a few product options are available and contractors should consider all these options to their advantage.
In fact, the smartest thing you can do is -- Get a specialist broker to do it for you!
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