Specialist surety underwriter Bonded Global Australia has partnered with Tokio Marine & Nichido Fire Insurance to offer surety bonds to the New Zealand construction industry.

Bonded Global will offer contractors access to non-bank bond guarantees without needing to put up cash.

A surety bond is a promise by the issuing insurer to pay the beneficiary if a second party fails to meet its obligations, such as fulfilling the terms of a contract.

In most cases it is a requirement in contracts for the contractor to provide the bond.

Bonded Global CEO John Earwaker says the offering will create opportunities for the construction industry to use capital more wisely and avoid having cash tied up in performance or retention guarantees.