Retention Bonds
At last a solution to the problems of cash retentions.
No longer do you, the Contractor, have to leave your cash with your clients or contractors.
Key Benefits
- Improve your cash flow by avoiding retention deductions
- Avoid lengthy negotiations to recover retention money
- Retains client security that the contract will be completed and any problems rectified
- Agree Contract Certainty at the start of a contract
- Access to all leading UK Bond underwriters
Trade Direct Insurance, in partnership with HCC International Insurance Company plc, can offer a retention bond instead.
A Retention Bond is issued in favour of an employer where the employer has agreed to waive the right to the deduction of retention monies from sums owed to the contractor for work performed. Generally the retention percentage is between 3% to 5% of the contract price and the bond issued will be for the retention percentage.
How it works
Typically, a main contractor could hold up to 5% of the contract value for a period of up to 12 months. The sub contractor then has to wait for these monies to be returned which can affect cashflow in the business. A retention bond will provide the main contractor with the same ‘guarantee’, but the sub-contractor has the real benefit of retaining the cash in their account. The only outgoing for the sub-contractor is the fixed insurance premium.