FAQ's

What is a surety bond?
What are the advantages of having a bond from an insurance company?
What type of bonds do Zurich provide?
How do I apply for a bond?
Why do you need so much financial information?
Can you always offer terms after you receive applications?
What is the difference between surety & insurance?
What is a counter indemnity?
How much will my bond cost?
Can I ask you to cancel a bond issued to guarantee my obligations?
What are your payment terms?
Are you an authorised insurance company?
Why is it important that surety bonds are obtained from a regulated insurance company?
What are your opening hours?
Still have other questions?

What is a surety bond?

A surety bond is a guarantee to pay the direct loss suffered as a result of a breach of contractual or legal obligations.  In practice, this breach would usually occur if the party responsible for these obligations becomes insolvent.  A surety bond is a written agreement that transfers risk of contractors default to a surety providing protection for the employer under a contract.

Top of page

What are the advantages of having a bond from an insurance company?

Zurich Global Corporate UK's surety business, formerly carried on by Zurich GSG Limited has been at the forefront of the specialist surety bond market for over 60 years.  We are a member of Zurich Insurance Group Limited – one of the largest insurance and financial services providers in the world.

Our superior technical expertise means that we can offer invaluable assistance with bond wordings, working with you and your advisors to identify unusual or onerous bonding risks (although we always recommend that clients should obtain their own independent legal advice on bonded transactions)

All applications receive the highest personal attention.  Facility applications are usually reviewed within two working days.  Once a facility is in place, we will issue bonds on the same day*

You can plan ahead and tender for new work in the knowledge that you have a facility available to meet your bonding requirements.

When a bank issues a bond, the value of such a bond is usually offset against a contractor’s bank facilities.  Having a Zurich surety facility means that your working capital and bank borrowing facilities are not affected.  Zurich surety bonds can be a very useful addition to your company’s liquidity.

Beneficiaries of a Zurich bond can be assured that not only have we assessed the financial strength of our clients, but also their capacity and capability to fulfil their contractual obligations to completion.

Zurich will review bond wordings, without any additional charge, and work with you and your advisors to identify unusual or onerous bonding risks.

*It may be necessary to negotiate amendments to non-standard bond forms.

Top of page

What type of bonds do Zurich provide?

We issue many types of bonds and guarantees for different industries and obligations. Some examples of the bonds we provide include; performance bonds, advance payment bonds, retention bonds, road and sewer bonds, infrastructure bonds, HM Revenue & Customs bonds, regulatory and license bonds, court bonds and bonds of caution.  This list is not exhaustive and if you do not see the product you require listed please contact us to see if we can assist.

Top of page

How do I apply for a bond?

We usually need audited accounts for the last two years (consolidated accounts where the company is part of a group), up-to-date management accounts and details of your banking information.  A copy of our facility and bond application forms can be downloaded from this site.  Once we receive them we aim to review your application and contact you within two working days.  All information provided will be treated in the strictest of confidence.

Top of page

Why do you need so much financial information?

As a surety facility is a line of credit, we must assess your financial standing. Our rigorous underwriting criteria means that we need to understand your business which involves fully reviewing audited accounts up to date management figures and banking information.

We underwrite on a consolidated basis, so if your company is part of a larger group of companies we do require financial information from your ultimate parent company.

Once a facility is in place, although we like to maintain regular contact, we do not normally require further information until facility review and bonds can be issued with the assurance that a thorough assessment has taken place.

Top of page

Can you always offer terms after you receive applications?

All applications for a surety facility are reviewed by an underwriter.  Applications must meet our underwriting criteria in order for terms to be offered.  In some cases a facility may only be offered subject to the satisfaction of additional conditions.  In some cases we may, unfortunately, be unable to offer terms.

Top of page

What is the difference between surety & insurance?

Surety bonds (as contracts of guarantee) are not contracts of insurance.  They are made available on recourse terms so that, if the surety has to pay the employer, it is entitled to seek reimbursement from the principal / contractor.  Unlike indemnity insurance, where the premiums effectively pay for any losses, surety bond premiums are ‘credit and service fees’ charged for the use of the surety company’s financial backing and guarantee.

Top of page

What is a counter indemnity?

A counter indemnity is a legal agreement which entitles Zurich, as guarantor of your surety bonds, to be reimbursed in the event that we have to pay any claims under the bonds we have issued on your behalf.

A counter indemnity reinforces our common law and statutory recourse rights against the company for whom we issue bonds and for its group.

Top of page

How much will my bond cost?

We have no fixed rates.  Each case is reviewed upon its own merits.  The rate applicable will be determined by reference to all the factors considered in our underwriting appraisal but primarily the financial strength and the likely volume and nature of the bonds.

Top of page

Can I ask you to cancel a bond issued to guarantee my obligations?

Generally not.  Bonds (unlike indemnity insurance) are agreements between three persons (Employer / Contractor / Surety) for the benefit of one of them (the Employer).  Unless the bond is released or expires in accordance with its express terms, only the Employer can agree to release / cancellation.

Top of page

What are your payment terms?

Payment terms are normally 30 days, although on occasions payment will be required before a bond can be issued.

Top of page

Are you an authorised insurance company?

Yes.  Zurich Insurance plc is authorised by the Irish Financial Regulator and subject to limited regulation by the Financial Services Authority.  Details about the extent of our regulation by the Financial Services Authority are available from us on request.  Bonds are issued by Zurich Insurance plc through Zurich Surety, Cypress House, Water Lane, Wilmslow, Cheshire, SK9 5EG.

Zurich Global Corporate UK is a trading name of Zurich Insurance plc.

 Top of page

Why is it important that surety bonds are obtained from a regulated insurance company?

The beneficiary of a bond must be certain that the bonds it obtains offer the protection it requires.  It is therefore essential that the surety company can meet its obligations in the event of a claim.  This certainty cannot be assured if bonds are not issued by regulated institutions.

Employers should check proposed surety companies with the Association of British Insurers (who have a list of members, including Zurich, authorised to provide bonds) and the Financial Services Authority.

Top of page

What are your opening hours?

Our core opening hours are 9:00am to 5:00pm although calls will normally be answered between 8:00am and 6:00pm.

Top of page

Still have other questions?

We have tried to answer as many frequently asked questions as possible.  If you cannot find an answer please do not hesitate to contact us.