Off-Site Materials Bond
Off-Site Materials Bond
An Off-Site Materials Bond is a surety bond that protects the value of materials purchased for a project but stored off-site before installation. This bond gives the employer confidence that materials they have paid for or are liable for will be delivered and used as intended.
It is commonly used in construction contracts where materials are procured in advance and stored in a third-party facility, warehouse, or supplier premises. The bond ensures that, in the event of supplier failure, insolvency, or other issues, the value of the off-site goods is protected.
Key Features
01
Covers high-value or long-lead items stored away from the construction site
02
Guarantees that off-site materials will be delivered and incorporated into the works
03
Reduces the need for clients to withhold payment until delivery
04
Can be tailored to meet the conditions of a specific JCT or bespoke contract
05
Offers comfort to funders and developers who are advancing payment before delivery
What is a Bond?
Placing your first bond? Or just need a refresher? Read on for the what’s what of surety bonds.
Surety protects a business from financial losses, usually caused when one party fails to fulfil their end of a contract. By placing a surety (usually in the form of a bond), a business makes sure that all the project bills will be paid on time should there be any disruptions or problems fulfilling the contract.
Principal
The Principal is the business placing the bond. They are making a promise to the Obligee. To them, the Surety bond is like insurance.
Surety
The Surety promises to pay the Obligee should the Principal not do as they promise.
Obligee
The Obligee is the party that requests the bond from the Principal.
When is an Off-Site Materials Bond Required?
This bond is typically required in construction projects when:
- A contractor seeks early payment for materials not yet delivered to site
- There is a need to secure specialist or imported items in advance of the build schedule
- The value of materials stored off-site is significant, and the employer requires assurance that those materials will ultimately form part of the project
- Developers or funders request financial protection for materials already paid for but not yet on site
It is particularly relevant on large or complex projects where bespoke components or overseas shipping timelines are involved.
Can PS Surety help?
PS Surety is a dedicated surety bond brokerage and we would be delighted to assist any contractor with placing performance bonds. We are fully regulated by the FCA and we guarantee that we provide our clients with:
The best possible terms available in the market
An honest, open and joint approach to our client’s Surety needs
Detailed client dashboard providing information on every bond ever placed
Communication when bonds become overdue
A single touch point within our organisation for wording reviews, quotes and queries
Rapid responses
That sounds expensive!
Our service is completely free to contractors. We are paid a commission by the surety providers on each bond that we place with them on behalf of our clients, the details of which are fully disclosed in our client dashboard.
The surety providers are happy to pay our commission because we specialise in bringing them business which fits their ever changing underwriting criteria. We also deal with frequent queries, wording issues, bond drafting and general administration.
The price that you pay PS Surety for a bond is the same price that you would pay any Surety if going direct.
Frequently Asked Questions – Off-Site Materials Bonds
What does an Off-Site Materials Bond cover?
It guarantees that specific materials, identified in the bond, will be delivered and incorporated into the project, even if the contractor or supplier fails to do so.
Who typically requires this bond?
Employers, developers, and project funders often request it when early payment is being made for off-site goods, especially where materials are stored at a third-party facility or outside the UK.
How is the bond value calculated?
It is typically equal to the value of the off-site materials being covered, based on invoices, schedules, and valuation certificates.
How long does the bond remain in force?
The bond stays active until the materials are delivered to site and incorporated into the works, or until a defined expiry event or handover stage specified in the bond wording.
Is a site inspection required?
Often, yes. To mitigate risk, the surety provider may request verification of the storage facility, insurance cover, and title documentation to confirm ownership and condition of the goods.
Can it be used with a JCT contract?
Yes. Off-Site Materials Bonds are frequently aligned with JCT or NEC contracts, where off-site materials can be included in interim valuations once adequately secured by the bond.
How can PSS help?
We assist contractors and developers in structuring off-site materials bonds that meet client requirements and contract terms. Our team manages the surety market engagement and ensures fast turnaround with clear, transparent advice.
Off-Site Materials Bonds Made Simple
We simplify placing bonds with a personalised service and the best price available in the market.