Surety

Our surety experts provide an industry-leading, innovative bond consulting service to organisations.

Companies in the construction and engineering industries often need to provide their clients with performance bonds and other third-party guarantees to ensure contractual obligations are met.

The ability to provide such bonds and guarantees can be a critical differentiator when bidding for contracts, and failure to provide a bond can ultimately lead to disqualification from the bidding process.

Marsh’s Surety Practice provides a complete solution for sourcing surety bonds. From arranging bond facilities and ensuring adequate capacity, to providing advice on bond wordings and indemnity negotiation, we bring together the scale, scope, and intellectual capital of the organisation to deliver innovative and high-quality surety risk solutions, domestically and globally.

Marsh has developed long-standing relationships with the leading global surety providers, which enables us to source and develop surety solutions for you whilst aiming to deliver very competitive terms.

It is our aim to add real value to your business. We aim to save you time and money and help you to reduce risk.

We hope you see the value that our services could bring to your business and welcome any enquiries in order to satisfy your surety requirements.

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billion placed annually — largest global surety brokers by volume 

320

Global network of around 320 surety specialists

6,000+

clients around the world with deep industry knowledge in all major industries

Surety bonds are guarantees issued by an insurance company on behalf of a firm in favor of a beneficiary. They are used to guarantee completion of a project or the supply of a good or service.

The most common beneficiaries of surety bonds are government entities, for example, in relation to a road project financed by a government using taxpayer funds. Such entities may also include taxation authorities, customs authorities, courthouses, and environmental protection agencies.

In the private sector, a beneficiary is the party serving as the employer, project owner, or buyer of construction projects or manufactured products.

Surety bonds also can be used as a (permissible) payment guarantee and are either regulatory or commercial/contractual in nature.

Those that are regulatory in nature include:

  • Bonds required by government in connection with a construction project, i.e., roads, airports, harbors, or rail.
  • Bonds required of importers in favor of a customs authority to guarantee payment of taxes and duties.
  • Bonds required for the proper care of public lands when extracting or exploiting natural resources.
  • Payment bonds connected with legal disputes with a government over a tax assessment.
  • Litigation bonds covering the appeal of fines, penalties, or damages arising out of legal disputes for unfair market competition.

Non-regulatory bonds are issued as contract or payment security to support contractual or payment obligations. The surety acts as a third-party guarantee.

Surety is the insurance sector equivalent of a bank guarantee (i.e., letter of credit). However, surety can help generate additional liquidity for banks and corporations – and the market overall. It plays an important role with capital relief and preserving valuable liquidity resources, especially during volatile economic times.

Surety allows a business to participate in contracts that require third-party contingent collateral. It can also help improve a business’s liquidity position, as surety bonds sit off the balance sheet, and therefore do not use lending facilities. Surety can further improve liquidity positions as bonds can be posted in lieu of capital payments.

Many businesses make use of surety, including, for example:

  • Construction
  • Energy and power
  • Food and beverage
  • Retail
  • Manufacturing
  • Communications, media, and technology
  • Financial institutions
  • Mining

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Egbert Tseng

FINPRO Leader

  • Taiwan