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Bonds for Housebuilders

Housebuilders will often need to provide local authorities with section bonds and other third-party guarantees to ensure contractual agreements and obligations are met. In some cases, surety bonds can also be used to defer payment on land purchases, providing significant cashflow advantages.

The ability to provide such bonds and guarantees can be a critical differentiator when negotiating with local authorities and landowner/developers. Marsh’s Surety Practice has the experience, expertise, and insurance market relationships to ensure you have sufficient bonding capacity, at competitive terms.

The insurance market prefers to provide guarantee bonds that are conditional in nature and relate directly to the underlying contractual obligations. This type of instrument is ‘off balance sheet’ and will not impact or reduce your working capital facilities. An insurer will usually take security by way of a counter indemnity from the company (or group) and will not charge an arrangement or non-utilisation fee. Bond premium is paid solely on the individual bond requirement.

Not all bond providers are the same and each can have a different opinion when it comes to analysing credit risk, pricing bonds, or reviewing bond wordings. Marsh has access to the entire regulated surety market and can ensure that the most appropriate surety companies are approached for your bond or bonds.

Our team of surety experts provide a range of services, from arranging bond capacity, to providing advice on bond and indemnity wordings.

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