Insurance
Bond
Performance Bond Insurance
What does it cover?
A Performance Bond is required in the event a Contractor’s tender has been accepted by the Principal and a Letter of Award is issued. The main purpose of the Performance Bond is guarantee that the Contractor fulfills the contractual obligations towards the completion of the contract.
Key Coverage
This type of bond is usually required by the Principal to ensure that the Contractor fulfills his contractual obligations e.g. within the period specified or in accordance with the conditions of the contractor.
The bond value is usually 5% of the contract value but this may vary.
If the Contractor does not complete the contract within the time specified and if no extension in the period is allowed, then the Bond or Guarantee is liquidated.
Basic of Sum Insured
Contractual Requirement: To cover on the limit stipulated in a contract.
What We Don't Cover
Note:
This list is non-exhaustive. Please refer to the sample policy contract for the full list of exclusions under this policy.
There is no exclusion stipulated in the Bond wordings/ policy. However, Insurers are not allowed to underwrite financial guarantees and bond/
indemnity as listed below:-
1. Foreign Workers’ agencies involved in recruiting foreign workers. This would include foreign maids agencies.
2. Tourist agencies for management of foreign tourists in Malaysia.
3. Lost share certificates.
The bond/ indemnity that cannot be underwritten by insurers includes but not limited to the list as specified above.
This list is non-exhaustive. Please refer to the agent or the insurance company directly for more information.