A bond is a guaranty taken by a company/bank against non performance on the part of a contractor.The need for a bond arises either when a party seeking a bond is obliged by contract or legislation to make a certain deposit of money as security before he could be allowed to execute certain jobs.

Guaranty Trust Assurance Plc offers the following bonds:

• Performance Bond
  A performance Bond is required of a contractor to guarantee the full and due performance of the contract according to plans and contract specifications. This commits the insurer to ensure that the physical work (contracts under bond) is completed.
• Advance Payment Bond
  Where the employer (oblige) finances a contractor by Advance Payments on contract, he can secure repayment of the advance by means of a bond. The amount guaranteed should decrease in accordance with the portion of the work performed usually, a percentage of the monthly bills are fixed to reflect this.
• Credit Bond
  This bond covers inability of a debtor to honour his obligation under a financial transaction. Usually, such transaction is between a bank and their customers. Insurers depend mainly on the assessment done by the credit committee of the bank in granting cover.
• Counter Indemnity Or Counter - Guarantee
  A way of reducing the effect of the above action is by insurers insisting on counter- guarantee being issued either by the employer or the contractor's personal representative. In a contract of guarantee, the guarantor (insurer) has a common law right of indemnity against the person guaranteed (contractor). Despite this right, insurers frequently insist on a separate written counter - indemnity in order that its position may be protected if a claim arises under the Bond.

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