What Are Bid Bonds and Tender Bonds?
Bid bonds and tender bonds are similar guarantees to the prospective employer or main contractor that the tendering party will be bound in accordance with the terms of the bid if their bid is accepted.
This type of bond is typically payable-on-demand (rather than after ascertainment of actual loss suffered if any), and for this reason, it is likely sourced from the company’s bank rather than an insurance company.
Do You Need a Bid/Tender Bond?
In some countries, bid/tender bonds are a requirement for a construction company making a bid for a construction project. By asking the construction company to acquire a bid bond or tender bond, it discourages them from submitting bids for unrealistically low amounts.
Bid/tender bonds don’t tend to be used in the UK and are more common in overseas construction industries, including those in Africa and Canada. If you have a company that operates in countries that use bid/tender bonds, talk to us about multinational insurance.
A product that fills a similar role in the UK (though they are not interchangeable) is a performance bond. Find out how Bid/Tender bonds compare to other types of surety bond, including performance bonds, here: surety bonds.
Why Partner With An Insurance Broker For Bid/Tender Bonds
Prices for bonds & guarantees often vary significantly from one insurer to another and the way to get the best price is to look at all your options. That is where a broker like FinCred comes in.
The bond market is very active and competitive, so it should be tested and explored so you can get the maximum benefit from it. That’s what the experts Fincred does for you, whether you require a new ad hoc single bond or a “facility” for regular use.
Even once your bond is purchased, taking proper advantage of it might be harder than you expected if you don’t have somebody knowledgeable about bonds working with you. Sometimes, the bond wording requested by the main contractor or employer may often be an onerous wording that could leave you at a disadvantage.
You can make sure that you find a bid bond or tender bond that works for you. Contact us today and let us help you find a solution.
Work With Fincred, An Expert Bond Broker
Don’t take chances when trying to find bid bonds and tender bonds. By using Fincred’s surety bond service, you ensure that:
- You will know you are complying with the required laws
- You will have access to a wide range of trusted, reliable providers from our network
- You can maximise your cost/benefit ratio
- You have the advice and backing of a surety expert with decades of experience in the industry
FinCred specialises in all types of bonds, including performance bonds, construction bonds, and other types of surety insurance. With the best interests of our customers in mind, we are your trusted partner in insurance.
If you want to find the best bond agreement for your business, contact us today.