Having been engaged as an independent loss adjuster in the handling of claims on performance guarantee bonds in the construction industry for the past 20 years, I continue to despair at the lack of understanding of them shown by employers and their advisers.

Victoria limits her comments to what she terms performance bonds, presumably to differentiate them from on demand bonds, but apparently restricts her comments to the industry standard ABI bond and fails to address the extensive range of other forms of performance bonds that are available, such as the financing bond, the adjudication bond, the retention bond, the repayment bond and many others that are bespoke for particular construction ventures.

Her apparent limit of knowledge is also matched by most participants in the employer’s professional team who, on a “tick list” basis, ensure a bond is provided but have little input into its application. Of course, no employer sets out to work with a contractor that is likely to default or become insolvent, so the bond is, in my view, regarded as a necessary evil never to be called upon. We are conditioned to take out insurance on our homes, our cars, our mobile telephones, our holidays, and we do so in the hope that we never have to have recourse to those indemnities. It is my belief that performance guarantee bonds are regarded in the same light but, with the precarious state of our industry, it is more necessary than any time in the past 12 years that the right kind of bond is in place.

G Barry Higgs, BPCS

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