Application Process for Bonds

We appreciate that most companies have never been asked to provide a bond and so have put together ‘The Application Process’ for those new to bonds. We will always endeavour to make sure the process takes the minimum of your time, letting you get on with running your business.

You

Depending on the requirements of the beneficiary/employer we can normally obtain a price for you with only the briefest of information as outlined below from 1-7 (please complete our short application form).

  1. Your company name including if relevant your company number.
  2. The name of the Beneficiary/Employer.
  3. Brief details of the contract to be covered.
  4. Contract price.
  5. Bond value.
  6. Period of the bond.
  7. Where available, a copy of the bond wording and any other specific requirements.

However, depending on the markets we have to source the bond from then additional information may be required such as

  1. Audited accounts.
  2. Completed application form.
  3. Management accounts.
  4. Bank Information form.
  5. Net Worth Statement

We will advise you at the time of our first discussions which of these if any may be required.

Us

  1. Once we have received the details or if necessary the application we will then obtain as many quotes as possible to provide you with the most cost effective terms.
  2. On receipt of the first terms from underwriters we will then provide you with terms sheet showing the premium cost and any other additional security underwriters require.
  3. We will continue to provide you with terms from other underwriters as they become available and will discuss with you the differences and implications of any additional security.
  4. Once you have accepted underwriters terms and provided any additional information requested, you will be asked to pay the required premium in full before underwriters will proceed further.
  5. On receipt of the premium we will send you any legal documents that need to be executed (such as Corporate Counter indemnities CCI’s).
  6. Once the additional paperwork has been completed and returned plus any cash security which may have been requested by underwriters has been deposited;
  7. Underwriters will issue the bond, to you as you will be required to execute it as well.

 

Additional security underwriters may require?


The following is a list of often asked for additional security. What is requested will be determined by your financial stability and the terms and type of bond.

Corporate Counter Indemnity (CCI): This is the most basic security requested and is normally always required. As in most cases claims arise when the contractor ceases to trade the CCI can be submitted by the underwriters to the liquidators as proof of being a creditor.

Personal Guarantees (PG’s): Fairly common. The PG’s will normally be from the main Directors and shareholders of your company.

Cash Collateral: Up-front cash deposit. Returned on satisfactory discharge of the bond.

Build up fund: more common since the credit crunch replacing CC’s. The build up fund allows the security to be built up rather than paid up front.

We will of course explain the implications of each one with you at the time of processing the bond and of course if you have any questions please don’t hesitate to ask.