What is Road Bonds Insurance and who needs it?


Road bonds insurance is a specific type of cover that is needed when a construction project, such as a housing development, involves roads and sewers and is handed over to the local authority when the project is complete. It’s usual for the local authority to take on responsibility for the roads as soon as they are built, but will need confirmation that road and sewer bonds insurance is held before they will ‘adopt’ them. Road bonds insurance covers the possibility that the project doesn’t meet the terms and conditions of the contract that has been agreed. This might be related to deadlines or could be to do with the standards of work achieved not being as contracted, or even the works being incomplete. It means that if the developer or construction firm doesn’t hold up their end of the agreement, there is a guarantee that this will be remedied with the bond insurance.

Who takes out Road Bonds Insurance?

Road bonds insurance is generally the responsibility of the developer or construction firm to take out, as they are who would otherwise be held liable if the road and sewer agreements are not met by their work.

It’s common for housing associations, if they are managing the construction project, should be responsible for taking out road bonds insurance for their housing development projects.

What about sewer bonds insurance?

The relevant water authority will take responsibility for sewers built by developers, construction firms or on behalf of a housing association. In order for them to do this, there must be a road and sewer bond in place to outline exactly what is required and guarantee that the sewers will meet these standards and deadlines so that the handover can go ahead. If the bond terms are not met, the insurance will ensure that the work can be completed as needed. If you need road and sewer bonds insurance, we can help. Contact us for more information.

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Advantage Home Construction Insurance (AHCI) provides structural defects insurance – operating nationally with offices in Warrington, London and Birmingham – offering development-related insurances and a service designed to give customers peace of mind.

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