Contract Bond
Many clients require contractors to provide a guarantee as part of their tendering process or as an essential condition for awarding a contract. These guarantees are most frequently required in the construction industry, but can also be requested in other sectors.
These guarantees can take several forms:
Certified cheque.
Bank letter of credit.
Bonding.
What is Bonding?
A surety bond is a commitment by a third party (also known as “the surety”) to ensure that the obligations of another entity (or person, often the contractor) to a third party (often the client) are met.
In other words, the surety endorses the obligations of the contractor or company being guaranteed.
There are several types of guarantees that clients may ask contractors to provide:
The Advantages of Being Bonded
How to Obtain a Bond?
Insurers acting as sureties base their cases on a specific risk. Just as a bank would do before granting credit facilities, a surety wants to know about the financial health of your company and its shareholders.
The surety also wants to be certain that the contractor has a good reputation and the expertise and skills needed to successfully complete its various projects. It’s important to determine whether the contractor has the financial strength to withstand a loss on a project or the necessary credit facilities to finance its activities. Each surety uses its own underwriting criteria, while they have several in common.
Other factors may also be taken into account, depending on the sector of activity, type or scope of projects on which a contractor wishes to bid. These factors also come into play when establishing the terms and conditions of a project, or deciding whether to endorse an exceptional project for a contractor.
In short, the conditions offered will depend on a set of variable factors unique to each application. A solid business relationship, based on trust between a surety and a contractor, is paramount when it comes to authorizing a major surety application.
Why Do Business with Cautionnement Expert?
A Multidisciplinary Team Specializing in Bonding, Credit Insurance and Deposit Insurance
We specialize exclusively in surety bonds, credit insurance and deposit insurance, so you’re dealing with experts with in-depth knowledge of these fields.
In-depth Knowledge of the Construction and Manufacturing Sectors
Our financial analysts come from a wide variety of sectors, and they know the specifics of the manufacturing and construction industries well because they deal on a daily basis with decision-makers and business leaders who have issues and needs similar to yours.
Fast, Comprehensive Financial Analysis
Our team quickly and conscientiously analyzes your company’s financial situation before presenting your file to a surety. We'll help highlight your company's strengths so that you can present it to sureties in the best possible light, giving you the best possible chance of success.
Knowledge of Insurers’ Underwriting Standards
Our team also supports you throughout your relationship with the surety so that a bond of trust develops harmoniously, and to ensure that your file moves forward smoothly and that conditions remain the best in the market.
Greater Negotiating Power with Insurers
Our clients include hundreds of contractors from all over Quebec. Our cutting-edge expertise, combined with our access to all bonding markets, means we can obtain the best possible terms for your project.
Your Ally in Service and Advice
Our financial analysts are with you every day, acting as your privileged advisors to help you with your development and growth projects.
Whether it's to help you understand the implications of a quote or project, to support you in an intergenerational business transfer, or to accompany you as you seek a surety bond for an exceptional project important to your company, we'll be there to advise you.