Surety bonds play an important role across many industry sectors and offer a valuable alternative to bank guarantees. Our specialists can help you find the best surety solution to match your needs.

What is a surety bond? 

The surety market is a niche part of the insurance market specialising in the provision of bonds and guarantees. A surety bond is a financial instrument issued by an insurance company in the form of a ‘Guarantee’ that certifies the successful performance of one party to another under a contract. The bond provides monetary compensation in the event that specified obligations are not performed. 

Though issued by an insurance company, a surety bond does not operate as a risk transfer mechanism like traditional forms of insurance. Issued on recourse terms, it is considered a line of credit; or in accounting terms, a ‘contingent liability’ off balance sheet. Given the financial nature of bond facilities, a pre-requisite is the entry into a Deed of Counter Indemnity in favour of the surety. This is a legal agreement that affirms the surety’s common law position to seek a recovery from the bonded Principal should there be a claim. 

Benefits of surety bonds

  • Flexibility and capacity to operate alongside traditional banking facilities
  • No tangible security or collateral is required, thereby freeing up assets for other purposes
  • Can replace Letters of Credit and Bank Guarantees, releasing trapped working capital
  • Greater financial flexibility by allowing bank credit lines to be released and used more cost effectively 
  • Strong financial strength rating of surety providers (between S&P A and AA), often higher than banking partners 
  • Transparent and competitively priced

Who we can help

Surety bonds are utilised across a number of sectors in support of various contractual, regulatory and licensing requirements. Industries that often rely on surety solutions and where we are well placed to assist include, but are not limited to the following:

  • Construction
  • Oil & gas 
  • Renewable energy & environmental technology
  • Engineering
  • Infrastructure / transport
  • Manufacturing
  • Retail
  • Shipping
  • Support services
  • Food & drink 
  • Importers / exporters 
  • Shipbuilders 
  • Pharmaceuticals 
  • Automotive 
  • Transportation 
  • Waste management
  • Real estate and property owners 
  • Aerospace 

Examples of surety bonds we can arrange

Contract bonds 
Contract bonds are typically required under the terms of a contract and guarantee a variety of obligations, from construction contracts to service and delivery contracts. Examples of contract bonds include:

  • Performance bond 
  • Bid bond 
  • Advanced payment bond 
  • Retention bond 
  • Warranty & maintenance bonds
  • Offsite materials bonds 
  • Developers & infrastructure bonds (section agreements) 
  • Ship building bonds 
  • Local Government Pension Scheme bonds

Commercial bonds
Commercial bonds are used in support of regulatory and licensing requirements and other commercial undertakings. Examples of commercial bonds include: 

  • Restoration bonds
  • Decommissioning bonds 
  • Insurance deductible guarantees 
  • Deferred consideration / payment bonds 
  • Environmental bonds 
  • Duty deferment / customs guarantees
  • Admiralty bonds 
  • Travel bonds 
  • Court bonds 
  • Letter of credit replacements 
  • Pension deficit
  • Captive retention bonds

Why Miller? 

We offer a wide range of solutions and services made to fit client requirements, from transactional contract and commercial bonds to complex innovative bespoke solutions.

With direct access to sophisticated surety markets, locally and internationally, our team of specialists help clients navigate the dynamics of the surety market, enabling businesses to benefit from the added value surety provides. At the core of our offering is working closely with key stakeholders to develop a deep understanding of our clients’ business, we then work to set strategic goals to provide the most appropriate and effective surety bond solutions. Our experienced and dedicated team of surety specialists provide clients with : 

  • Expert knowledge on bond wordings and counter indemnities
  • Optimum terms and conditions 
  • Facility management 
  • Capacity management and syndication of capacity for large complex transactions 
  • Competitive pricing
  • International capabilities