Bonds Insurance:
Ensuring Financial Security and Peace of Mind
Bonds play a crucial role in various industries, serving as financial guarantees that ensure contractual obligations are met and projects are completed as agreed upon. Whether you're a contractor bidding on a construction project or a supplier fulfilling a government contract, bonds provide reassurance to your clients and stakeholders. However, with the complexities of bond requirements and the potential risks involved, having the right insurance coverage is essential. That's where bonds insurance comes in.
Types of Insurance Under Bonds
These bonds are normally issued to the Immigration Department for processing of work permits, including those for self-employed Non-Kenyan residents, to facilitate stay in Kenya or for dependents who are not Kenyan Nationals. A claim under these bonds would arise if a person for whom a bond is given changes his/her employment contrary to the one specified in the work permit or is deported from Kenya.
Custom Bonds Insurance policy guarantees to the Kenya Revenue Authority for compliance with specific Customs / tax requirements. If you are importing merchandise into Kenya for commercial purposes or a commodity subject to other government agencies requirements (i.e. firearms or food), you must post a Customs bond to ensure that all duties, taxes and fees owed to the government will be paid. Requires specific documents for the type of bond covered.
These types of Bonds are normally associated with contracts for construction of property or erection of plant and machinery. Normally, payments are made by the principal to the contractor on either total completion of a project or on completion of each phase of the project. These payments are normally made after approval of the costs by the architects and quantity surveyors of the project. In any case, the contractor must use some of his own finances to do the necessary work and then await payment. Sometimes, the project may be so large that the funds required by the contractor even for one phase of the project may be beyond his financial resources, and in some cases, the principal may make and on account payment to the contractor, subject to the final costs being accessed, in which event, an Advance Payment bond will be called for.
These bonds are normally issued as a surety for due performance of a contract, such as construction of property, erection of plant and machinery, etc. Under these bonds, the bond amount is normally stated as a percentage of the contract amount. This amount is normally assumed to be the cost of calling for fresh tenders, including the cost of doing repair work, etc, on any work already done by the contractor, if the contractor fails or defaults on the contract. Under this type of Bond, if the contractor moves on to the site, but fails to finish the project or abandons it, the bond amount could be called for.
Covers the cost of tendering in case the tenderer does not take up the job after winning the tender
