Bonds Insurance

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  • What is Bonds Insurance?

    1. Customs Bonds

    If you import or export goods to or from Ghana, you’re legally required to pay customs duty immediately as the goods enter or leave the country. The Ghana Revenue Authority, acting on behalf of the Government of Ghana, will allow duty payments to be deferred if there is a guarantee in place from a reputable insurance company. 

    A Customs Bond from Hollard is a guarantee against any loss of revenue arising from the failure, default or non-compliance by your company in terms of your obligations to Customs when it comes to export/import duties. 

    These are the types of customs bonds we offer:

    a. Customs Agents House

    This bond is granted to Clearing Agents as a guarantee to Customs that should their misconduct result in loss of revenue to the state, the guarantor will pay Customs up to the value of the bond.

    b. Temporary Importation

    Sometimes you may need to import goods into Ghana for a fixed period of time before re-exporting these goods to their final destination. Since all goods imported into the country need to be taxed, importers use this bond to guarantee that they’ll pay their taxes even if these goods are not re-exported.

    c. Transit Bonds

    This is a guarantee given to transporters of imported goods destined for a neighbouring country where the transporter hasn’t paid their customs duties.  It covers them if the goods do not reach the stated destination, which can lead to a loss of revenue for the state.

    d. Warehousing/Security Bonds

    This bond is granted to importers whose goods are kept at a licensed bonded warehouse(s), pending payment of their import duties. If the importer defaults or fails to pay customs duties and taxes eligible on these goods at the bonded warehouse, the guarantor will pay Customs these lost duties.

    e. Removal Bonds

    These are guaranteed to Customs that should the goods being removed from a given warehouse(s) not reach their destination, and this leads to a loss of duty to the State, the guarantor will pay this amount to Customs. 

    2. Surety Bonds

    A surety bond is a contractual agreement among at least three parties:

    • The Obligee - entity that requires the bond. Obligees are typically government agencies working to regulate industries and reduce the likelihood of financial loss. 
    • The Principal - the primary party who will perform the contractual obligation (or the job). 
    • The surety - the insurance company that backs the bond. The surety provides a line of credit in case the principal fails to fulfil the task.

    Examples of such Bonds are Bid Bond and Performance Bonds.

    a. Bid Bonds

    A written guaranty from a third-party guarantor (usually an insurance company) submitted to a principal (client or customer) by a contractor (the bidder) with a bid.

    A bid bond ensures that on acceptance or winning of a bid by the customer or contractor, they will proceed with the contract and will furnish the obligee with a performance bond. In the absence of this, the guarantor will pay the customer the difference between the contractor's bid and the next highest bid.

    b. Performance Bond

    A written guaranty from a third-party guarantor (usually an insurance company) submitted to a principal (client or customer) by a contractor on winning the bid. A performance bond ensures payment of a sum (not exceeding a stated maximum) of money in case the contractor fails in the full performance of the contract. Performance bonds usually cover 100 percent of the contract price and replace the bid bonds on the award of the contract.

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