Construction warranty insurance

When organizing procurements and concluding construction contracts, the procurer often requires the contractor’s bank or insurance company to guarantee the fulfillment of the provisions of the construction contract.

During the works on a construction site, it is important for the contractor that no unexpected events cause delays to the scheduled construction works. To prevent such contingencies,  

InterRisk Vienna Insurance Group” AAS provides:
  • Bid bond - The insurer guarantees the insured a reimbursement of the costs of repeated organization of procurement or auction, in case the policyholder, upon winning the construction contract rights in the procurement (auction), withdraws from concluding the construction contract. The bid bond shall cease upon the conclusion of the construction contract, but no later than the insurance contract expiration period specified in the policy.
  • Prepayment bond - the insurer guarantees the insured an insurance indemnity in case the policyholder does not initiate the work or stops the work, failing to perform the work and/or deliver the materials in the amount of prepayment, under the provisions of the construction contract; the prepayment bond shall cease upon delivery of work and/or materials in the amount of prepayment, but no later the insurance contract expiration period specified in the policy.
  • Performance bond - the insurer guarantees the insured a reimbursement for outstanding contractual work in case the policyholder breaches the provisions of the construction contract. The performance bond shall cease upon signing the acceptance-delivery act under the construction contract, but no later than the insurance contract expiration period specified in the policy.
  • Warranty bond - the insurer guarantees the insured that, if the policyholder breaches the construction contract and fails to rectify any defects during the warranty period, the insurer will pay the insured an insurance indemnity for the outstanding contractual work. The warranty bond shall cease on the day of expiry of the warranty period stated in the construction contract, but no later than the insurance contract expiration period specified in the policy.
The insurance premium depends on the type of bond required, amount of the sum insured, as well as other factors and, on average, constitutes 0.9-3% of the sum insured.


Construction warranty insurance terms and conditions

The rules that were in force until 19.04.2017, you can find here.
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To purchase a policy, please, contact any of our branch offices in Latvia