We – CHJ Management try to keep all Insurance Brokers / Clients lives simple when dealing with Surety Bonds and therefore for all types of Bonds, our procedure is the Same.
For each new Enquiry, we will require the following:
- Please provide us with our Completed Enquiry Form for each Individual Requirement. We have a General Form, Rent Guarantee Enquiry Form, Deposit Guarantee Form and a Duty Deferment Bond Form
- Please provide us with our Completed Work In Progress [The Surety require information on Previous Contracts and Contracts in Progress that the Contractor / Client are / were involved in, to give the Surety an idea of the work that the Contractor / Client has been involved with].
- Please provide us with the Latest set of Audited Accounts for the Client Company. If these are over 6 Months Old, please also provide us with the Latest Management Accounts, no more than 6 Months Old
- Please confirm if there are any Parent or Associate Companies. If yes, please provide their Latest set of Audited Accounts. If these are more than 6 Months old, then we will also require their Latest set of Management Accounts. The Accounts are required, as the Surety will need to consider these Companies for Backup Security, even if these Companies are not directly involved with the Contract. An Associate Company is a Company which has Directors in common with the Client Company.
- A copy of the Bond Wording. Should a Bond Wording not be available from the Client / Beneficiary, the Surety will provide a Suitable Bond Wording
- Please provide us with a copy of the Contract / Agreement between the Client and the Beneficiary
- Full details of all available Security to support the Bond requirement.
As soon as we have received the above required Information, we will present the Requirement to the Surety and within 48 – 72 Hours, we will obtain Terms / Comments. These Terms will include a required Net Fee to the Broker / Fee to the Client, the Security required to support the Bond and the required Bond Wording. All Terms will include a Standard Counter Indemnity from the Client
Typical examples of Security Requirements to support the Counter Indemnity are as follows:
- A Parent OR Associate Company Deed of Counter Indemnity
- Personal Guarantees – Our Asset and Liability Statement will need to be completed and which can be found on the Forms Page. This Form needs to be fully completed with all Personal Assets for each Individual Director / Shareholder of the Client Company. This Form needs to be accompanied with a Letter from the Individuals Accountants on their Letterhead, certifying the Information provided is True and Accurate. We will also need confirmation of each Individual’s Full Name, Address, Date of Birth and a Utility Bill, no more than 3 Months old for Proof of Address
- A £—– Lump Sum Cash Security Payment
- An Assignment of Contract Debt
- A Floating Charge (a Second Ranking Charge may be possible)
- Legal Charge over Property (subject to Valuations and proportion of Equity held)
- A Statement of Contract Status (confirming there has been no Breach of Contract prior to the Bond Issue Date)
Each Terms Letter will be made up of a Combination of the above Security. It is very uncommon to see all forms of Security required for one Bond.
These Terms will be sent in a Standard From for consideration by the Broker / Client.
As soon as the Client is happy with the Terms, we will ask the Client to provide Confirmation in writing from the Beneficiary that the said Surety is approved. In order to assist the Beneficiary in their decision, we will provide the required Financial Information of the Surety.
Once we are in receipt of the Client and Beneficiary’s confirmation to proceed, we will ask for the required Net Fee to Broker / Fee to the Client to be paid with any outstanding information, including the said Cash Deposit (if required).
We will then request the required Security Documents to be produced by the Surety and we will send them on to the Broker / Client for the required Execution.
Once we are in receipt of the required and correctly executed Documents, we will be in a Position to request the Issue of the Bond from the Surety.