Drafting bond and associated security documentation 

We are experts at drafting complex bonds and the associated security documentation, including reinsurance and co-surety/ risk sharing agreements. 

We advise on bond wordings across all sectors and industries including: 

• construction 
• pensions 
• private equity 
• corporate warranty 
• duty deferment 
• VAT 
• travel and leisure (including all the usual ABTA wordings) 
• payment regulations 
• utilities (coal, water etc.).

We lead the field in drafting new and surety-friendly wordings whilst taking into account the needs of our regulated client base to ensure clarity, certainty and fairness. Our practical experience of claims gives us a unique insight into the unintended consequences of certain bespoke bond wordings. It allows us to alert our clients to certain issues arising from those wordings before they become reported cases at court and to help to draft around those wordings. We are not theorists; we have practical experience of calls on bonds and understand the issues which the courts have to face when dealing with unusual wordings.

We have a strong project-focused construction team who, as well as understanding the nuances of bonds, understand all forms of construction contracts. Especially relevant is the experience our team has in relation to large-value PFI, PPP contracts, including hospitals, schools, infrastructure and energy from waste schemes. Given that the surety’s liability under the bond is pegged to the underlying contract, we are vocal advocates that the surety should understand and review the form of contract that is being bonded. 

We carry out all forms of counter indemnity and security review and amendment. From the light touch indemnity mark-up to the provision of a wholesale suite of security documentation. We can advise on the best indemnity structures depending on the underwriting goals and additional risk mitigation/ covenant protection. Our objective is to ensure that sureties are not exposed to legal or structural subordination to maximise recoveries and strengthen the surety’s position in relation to other creditors, particularly banks.