Introduction

Bonding is a kind of contract which normally comes in the form of either a bank guarantee or insurance guarantee. The guarantee is given by a surety to accept responsibility for the performance of a contractual obligation entered into by one party with another in the event of the former’s default.

The implementation of revised guidelines for Bond by PIAM was made effective 1st June 2000 with the upward revision of rate, cash collateral and incorporation on Exclusion list. Also insurers only allowed to issue insurance guarantees for contract works awarded by the Government Agencies.

The Bond application to the Company must be supported by the following essential documents:

• Contract Guarantee Proposal Form
  
  
• List of Projects completed over the past 3 years (to attach copies of Certificate of Practical Completion)
  
  
• List of Project Underway on hand (Please attach copies of progress payment report)
  
  
• Monthly Bank Statements (since last audited accounts)
  
  
• List of Plants, Machinery and Equipment owned.
  
  
• Audited accounts (over the last 3 years) certified by auditors.
  
  
• Information on Third Party guarantors forms to be completed by each guarantor.
  
  
• All individual guarantors, including Third Party guarantors need to provide a letter of indemnity that has been witnessed by the Commission of Oaths
  
  
• Letters of Indemnity from Company need to be executed by the Contractor Company and third party Company , witnessed by a Commissioner of Oaths, with Common Seal therein.
  
  
• For Limited Companies/Public Listed Companies:
• Form 24 and 49 (duly certified by Company Secretary)
• Certificate of Incorporation (Form 9)
• Memorandum & Article of Association (duly certified by Com. Sec)
• A Directors' Resolution empowering the Directors to give indemnity to MUI Continental Insurance Bhd (Duly certified by Company Secretary) 
  Note : PIAM standard format on Company Letter-Head is required.
  
  
• For Sole Proprietorship or Partnership
• Business Registration From A/D (a certified copy)
  
  
• Letter of Acceptance for the tender and/or contract
  
  
• Copies of IC if all guarantors and third party guarantors
  
  
• Evidence of JKR or other authorities' classification as contractor.
  
  
• Photocopy of Letter from Bank confirming Overdraft (OD) or credit facilities
  
  
• Certificates from Major Supplies in PIAM's format
  
  
• Letter of Application from the agent/broker
  
  
• If sub-contractors are involved, individual Proposal forms completed by each sub-contractor under this contract.
  
  
• A Specimen copy of bond wording (if applicable)
  
  
• Cash Collateral as required under PIAM's Guidelines for Bond insurance.