Historically, banks have usually provided bonds. A bond is not an insurance policy per se but essentially a form of financial guarantee. It is a guarantee by one party (the surety or guarantor) to another party (the person requesting for the bond) that a third party (the person/company applying for the bond) will meet its contractual obligations.
NIC can provide the following types of bonds (guarantees)
- Performance Bond
- Advance Payment Bond
- Bid/Proposal Bond
- Shares Indemnification Bond
- Customs Bond
Prior to providing the guarantee, some basic documentation are usually required by the guarantor to enable assessment of the bond request.
These include but are not limited to the following:
- Completed Bond Proposal Form
- Certificate of Incorporation/Registration
- Letter of Contract Award
- Contract Agreement
- 3 Years Audited Statement of Account
- Evidence of previous Contract Performance (Certificate of Completed Jobs)
- Counter Indemnity by the Company
- Personal Indemnity by a Director of the Company
- In the case of Customs Bond the Bond form provided by the Custom & Excise department must be made available
- Similarly, Shares Indemnification Forms from the Company also to be provided in respect of shares indemnification bond
- Collateral Security up to a minimum value of the bond is required.