Contractor Bonds: Supporting Your Takaful Needs

As Contractors, our products are specially designed to suit your Takaful (Insurance) needs for the smooth and successful operation of your business.

Bid Bonds

This is normally the first bond that a contractor would need from a Takaful operator (Insurance Company) in respect of a contract. It is mostly required when the contractor is submitting his bid for the award of a contract and covers the following conditions:

• If the Bidder withdraws its bid during the period of bid validity specified by the Bidder on the Bid Form
• If the Bidder, having been notified of the acceptance of its Bid by the Principal during the period of bid validity:
• fails or refuses to execute the Contract
• fails or refuses to furnish the performance security
• Fails to correct errors

Advance Payment Bonds

When a contract is awarded to the Contractor, the next guarantee that the Contractor may need is the Advance Payment Bond, which the Contractor is required to submit to the principal as a security to enable him to take advance to start work if he does not have the funds from his own account and it is normally a percentage of the contract sum, which is recovered by the principal as the work progresses until he recovers the whole amount.

Performance Bonds

This is another guarantee that the contractor would need in addition to the Advance Payment Bond. It guarantees the contractors performance as a security for compliance with his obligation in accordance with the contract, and it is normally valid until the date of issue of the certificate of final Acceptance of the Contract.

Retention Bonds

This Bond provides guarantee for the contractor during the defects liability period to enable him to collect the retention amount if any and it is normally for a period of one year depending on the agreements in the contract document.

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Talk to our insurance experts

Speak with insurance experts and ask questions before finalizing your plans or if you want help regarding our services. Our dedicated staff is more than happy to call and guide you.

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