Road bonds insurance can be a topic that is left down the list of priorities on construction projects, but our guide can help clear up any confusion and help developers to understand why this kind of cover can make a real difference.
Why is road bonds insurance needed?
Road bonds insurance is needed for residential property developments because roads are built as part of the project and will eventually become the responsibility of the local authority to maintain. The road bonds insurance, taken out by the developer, protects the local authority from the risk of the roads that were built not being done to the required standards or configuration.
If there were issues with how the roads were build, the insurance covers the local authority for the cost of the remedial work that would be needed to rectify the problem.
Does road bonds insurance cover delays to construction work?
It’s likely that the agreement between the developer and the local authority concerning handing over the newly built roads to them will have attached timescales that the parties agree on before work commences.
As every developer knows, things sometimes happen in construction which can delay projects from the initial expected timescales. What are considered to be ‘standard’ delays on a project are unlikely to mean that the local authority will call in the road bonds insurance. However, if a project is left incomplete by the developer, then this might be done.
Why are sewer bonds often linked to road bonds?
Just as newly built roads are handed over to the local authority to maintain once the project is complete, sewers build as part of a residential development will become the responsibility of the water company that covers the region. Therefore, road bonds and sewer bonds can often form a single agreement between all parties to mitigate the risk of the work not being up to the required standard or otherwise as agreed.
Get your free quote for road bonds insurance from Advantage.