A bond acts as a financial guarantee in a three-way agreement. The surety, often an insurance company, promises to take responsibility if the contractor fails to uphold their end of the contract. This protects the employer, who receives compensation for the contractor's breach from the surety if necessary.
Advance payment bonds or Advance Mobilization bond act like financial insurance for construction projects. They guarantee the project owner gets their money back if the contractor receiving an advance payment fails to meet the contract. This protects the owner's investment and fosters trust in the project. While there's a cost to the bond, it can improve cash flow for contractors and promote a secure project environment.
The claim process for advance payment, bid, or performance bond insurance will generally follow these steps:
First, familiarize yourself with the specific terms and conditions of your bond contract. This document will outline the events considered a breach of contract and the process for filing a claim. Look for details like:
Compile all relevant documents to support your claim. This might include:
Contact your surety company and initiate the claim filing process. This may involve submitting a formal claim form along with the gathered documentation.
The insurance company will investigate your claim to determine if it falls under the coverage of the bond. This may involve contacting the contractor for their response and verifying the details of your claim.
If the insurance company validates your claim, they will determine the payout amount according to the bond limits and negotiate a resolution with you. This might involve reimbursing you for the advance payment, completing the project themselves, or hiring another contractor to finish the job.
Both are financial guarantees, but they protect against different risks. An advance payment bond ensures the client gets their money back if the contractor fails to start or complete the project, while a performance bond guarantees the project itself is finished according to the contract.
Not always, but some projects, especially larger ones, require a bid bond. This protects the client from contractors who submit bids but then withdraw, wasting the client's time and resources.
If you breach the contract and the client makes a claim, the surety company that issued the bond will cover the costs to complete the project. However, you will be responsible for reimbursing the surety company for the payout.
Surety companies specialize in issuing these types of bonds. You can contact a surety company directly or work with an insurance broker who can help you find the best option for your needs.
In Ghana, when you import or export goods, you typically owe customs duties immediately. However, the Ghana Revenue Authority allows you to delay this payment if you have a customs bond from a reputable insurance company. This bond acts as a guarantee that, if your company fails to meet its obligations regarding import/export duties, the insurance company will cover any lost revenue for the government.
Importers sometimes require temporary importation of goods into Ghana before re-exporting them to their ultimate destination. Given that all imported goods are subject to taxation, importers utilize bonds to ensure payment of taxes, even if the goods are not ultimately re-exported.
This bond is provided to Clearing Agents to assure Customs that in the event of their wrongdoing leading to revenue loss for the state, the guarantor will compensate Customs for an amount equivalent to the bond's value.
In the event that goods leave a warehouse and never arrive at their final destination, resulting in a loss of tax owed/duty to the government, the guarantor will be responsible to pay Customs that amount.
This acts like a financial guarantee for importers who store their goods in a special customs warehouse without paying import fees yet. If the importer doesn't pay the fees later, the guarantor (like a security deposit company) will cover those costs for customs.
This acts as a safety net for companies moving imported goods to a nearby country without paying customs fees upfront. If the shipment doesn't arrive at its intended location, this guarantee protects the government from losing potential tax revenue.
The claim process for advance payment, bid, or performance bond insurance will generally follow these steps:
First, familiarize yourself with the specific terms and conditions of your bond contract. This document will outline the events considered a breach of contract and the process for filing a claim. Look for details like:
Compile all relevant documents to support your claim. This might include:
Contact your surety company and initiate the claim filing process. This may involve submitting a formal claim form along with the gathered documentation.
The insurance company will investigate your claim to determine if it falls under the coverage of the bond. This may involve contacting the contractor for their response and verifying the details of your claim.
If the insurance company validates your claim, they will determine the payout amount according to the bond limits and negotiate a resolution with you. This might involve reimbursing you for the advance payment, completing the project themselves, or hiring another contractor to finish the job.
If you can't pay duties or taxes, or fail to properly re-export goods when required, the surety company will cover the costs for customs. This will likely trigger a claim on your bond and could impact your ability to obtain future insurance.
The cost of the insurance will depend on various factors like the value of your imports, your business history, and the bond amount required by customs.
In most cases, no. Customs bonds are typically obtained through a surety company, which requires you to have insurance in place to mitigate their risk.
The application process can be relatively quick, but it depends on the complexity of your needs and the insurance provider's procedures.
Also called Protection and Indemnity Insurance, Marine Liability Insurance offers protection for third-party liabilities that owners and corporations are exposed to during water-based operations. It covers injuries, illnesses, or even loss of life caused by vessel operation. Medical expenditures, damage to other vessels and cargo, collision incidents, and related expenses as a result of quarantine may also be covered
The range of covers includes
Traditional marine liability accounts that are typically covered, include:
In case of loss or damage to the ship, you need to immediately inform the insurance provider and follow these steps for making a claim:
Following documents are required to make a claim:
Keep the damaged property under the safe custody until advised by the surveyor / insurer regarding its disposal.