The recent pandemic has had a huge effect on the construction industry. One area we have received a particular interest in at Kerry London is Performance Bonds.
Thankfully, several of the providers that we work with at Kerry London are open for business but have, understandably, adopted a far more considered and cautious approach. Their processes have been adapted to ensure a more detailed level of checking and this has an impact on their evaluation and ultimate decision-making. Providers are paticularly looking at a businesses’ short-term resilience.
What are Bond providers looking for?
In short, Bond providers are looking for more information to obtain more certainty regarding business resilience. As well as the requirement for this additional information, the terms being offered are on a stricter level of wording, specifically on the release event.
Based on our recent experience, Bond providers are looking for the following information:
· An up-to-date Cashflow Forecast (for at least the next 12 weeks) – this should include projected income for current work in progress and company (group) bank balances.
· Evidence of cost saving actions, such as ‘payment holidays’ or reductions in amounts payable to finance or HP providers.
· Details of processes that have been implemented on site.
· Indication of whether staff have been, or remain, furloughed and percentage of workforce on your site[s].
· Whether your company has applied for Government Aid.
· Any recent correspondence with your bank[s] and an overview of the outcome.
· The latest company management information.
· Whether employers are currently paying you as per the contract terms.
· Whether the company has agreed an ‘extension of time’ notice for any sites.
If you already have a bond, or bonds, in place, our advice is to keep in regular communication with your insurer. This is particularly important if you are close to the bond release event, or even overdue.
Kerry London – we’re here to help
Should you require any further advice or more detailed support with securing a bond, our experts are on hand and happy to help you. Our experienced team have extensive knowledge in this complex field and have arranged bonds for more than £5bn worth of contract value in the last three years alone.
For more information, visit: www.kerrylondon.co.uk/products/bonds
Tel: 020 7337 4032
Email: [email protected]