Ensure project safety after completion
Secure your warranty claims digitally and effortlessly with nextsure's warranty bond. Conserve liquidity, build trust.
Fast digital processing
Fair conditions
Security for both contracting parties
The Performance Guarantee: Your Digital Shield After Project Completion
Preserve liquidity instead of security retention
Online Application and Immediate Feedback
For construction projects and work contracts
Transparent Cost Structure
What is a warranty guarantee and when is it needed?
A performance bond, often also called a warranty bond, is a specific type of surety insurance. It is intended to secure potential warranty claims of the client (e.g., a builder) against the contractor (e.g., a craftsman or construction company) after the acceptance of work. Typically, the client retains a portion of the contract sum (usually 3-5%) as security retention for the duration of the warranty period. With a performance bond, the contractor can release this security retention and receive the full contract sum paid out. The bond then takes the place of the withheld money. It is particularly relevant in the construction industry (according to VOB/B or BGB), but also in mechanical and plant engineering as well as in larger work contracts to guarantee the fulfillment of remediation obligations during the limitation period for warranty claims. For clients, it means security; for contractors, liquidity.
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Everything for your project security
Flash application
Apply for a guarantee online in minutes.
TopCondition
Fair premiums, transparent and without hidden costs.
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Monitor all guarantees online at any time.
Expert Advice
Expert advice for your specific requirements.
BonitätsBoost
Preserve liquidity, keep the credit line open at the bank.
VOB/BGB Safe
Legally compliant guarantees according to current standards.
FlexTerm
Customisable durations to suit your project needs.
PartnerNetz
Acceptance by all public and private clients.
SchnellPolice
Digital guarantee certificate often available on the same day.
Fast, digital, and customised – your benefits with nextsure.
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Advantages of the warranty guarantee for contractors
For contractors, such as construction companies or craftsmen, the warranty bond offers significant advantages. The key benefit is the improvement of liquidity: Instead of a security retention that ties up capital for years, the full contract amount becomes due and is paid directly after acceptance. This released capital can be used for new investments, ongoing costs, or financing additional projects, enhancing financial flexibility and competitiveness. Furthermore, a bond strengthens the trust of the client, as it signals professional risk management. Applying for a warranty bond with nextsure is also straightforward and digital, saving time and administrative effort. Compared to bank guarantees (credit guarantees), insurance bonds often spare the credit line with the house bank, as they are not counted against it.
Security and benefits for clients through the warranty bond
Even clients, such as private property owners or companies, greatly benefit from a warranty bond. They receive reliable protection in the event that defects occur during the warranty period and the contractor fails to meet their obligations for rectification or becomes insolvent. The bond certificate from a reputable insurer like nextsure provides a quick and straightforward way to cover the costs for remedying defects without having to engage in lengthy legal disputes. This minimizes financial risk and ensures planning security. The bond ensures that the contractually agreed condition of the work is maintained beyond acceptance.
The Process: How do I apply for a warranty bond with nextsure?
Applying for a warranty bond with nextsure is intentionally simple and digital to offer you maximum convenience. First, you fill out our online application form, providing information about your company, the client, and the project to be secured. This typically includes the amount of the desired bond (equivalent to the security deposit), the warranty period, and details of the construction project or contract. Upon receipt of your application, we review your details and creditworthiness. Thanks to our digitised processes, you usually receive feedback and a customised offer very promptly. Once you accept the offer and pay the first premium, we provide you with the bond certificate digitally and by post if needed. You can then give this to your client to release the security deposit. Our portal also enables you to transparently manage your bonds.
Costs and Conditions of a Warranty Guarantee: What Do You Need to Know?
The costs of a performance bond, also called a premium, depend on various factors. The key determinants are the amount of the bond, the agreed duration of the warranty period (typically 2 to 5 years according to BGB or VOB/B), the creditworthiness of the applying company, and the type of trade or project to be secured. The premium is usually calculated as an annual percentage of the bond amount. At nextsure, we place value on transparent and fair terms. We provide you with an individual offer that is precisely tailored to your needs. There are no hidden fees; all cost points are clearly stated. Long-term framework agreements for companies with regular needs for bonds can often lead to more favourable terms. A detailed calculation is provided during our digital application process, which quickly gives you clarity about the costs incurred.
Clients
Liability Insurance
Incapacity for Work
Insurance
Cyber
Protection
Alternatives to Warranty Bonds: A Comparison
The most common alternative to a warranty bond is the traditional retention of security, where the client retains part of the invoice amount until the end of the warranty period. However, this ties up the contractor's liquidity. Another option is a bank guarantee (surety credit), which often affects the credit line with the main bank and may involve stricter credit checks. Depositing money in an escrow account is also possible but also leads to tied-up capital. In comparison, a warranty bond from an insurer like nextsure offers the advantage of preserving the credit line, is often more flexible to handle, and can be processed quickly and digitally by specialized providers like Insurtechs. For contractors, it is usually the most liquidity-friendly and efficient solution to secure warranty claims.
Legal Foundations: VOB/B and BGB in the Context of Warranty Guarantee
The legal framework for warranty claims and their protection is primarily found in the German Civil Code (BGB) and in the German Construction Contract Procedures (VOB/B). According to § 634 BGB, the purchaser has various rights in the event of defects, including the right to subsequent performance. The limitation periods for defect claims concerning buildings are generally five years (§ 634a BGB). The VOB/B, which is often part of contracts for public and larger private construction projects, regulates defect claims in detail in § 13 and securities in § 17. § 17 para. 2 VOB/B stipulates that a security can be provided by withholding or depositing money, or by a guarantee from a credit institution or credit insurer. The warranty bond is thus an explicitly provided and recognized form of security that meets legal requirements and offers a solid legal basis for both clients and contractors.
Typical pitfalls and how to avoid them in a warranty bond
When applying for and using guarantee bonds, certain errors can occur that should be avoided. A common mistake is setting the bond amount too low or having a term that doesn't cover the entire guarantee period. Pay close attention to the contractual agreements with your client. Incomplete or incorrect information in the application can lead to delays or rejection. Therefore, it is important to prepare all documents carefully. Another point is the selection of the guarantor: rely on established and creditworthy insurers like nextsure to ensure the acceptance of the bond by the client. Do not fail to hand over the bond certificate to the client in a timely manner. For international projects, it is also important to consider the respective country-specific legal norms. A careful review of the bond conditions before finalisation protects against unexpected clauses.
What is the difference between a warranty bond and a security retention?
nextsure regards itself as your modern partner in the field of surety bonds, specialising in digital solutions such as the performance bond. As an insurtech, we combine expertise with efficient online processes. Our mission is to offer you tailor-made and easy-to-understand insurance solutions. The performance bond from nextsure is characterised by fast processing times, transparent costs, and a straightforward digital application process. We cater to digitally-savvy builders, tradespeople, and companies who value professional and liquidity-friendly protection of their projects. Rely on our expertise and our unique combination of niche portfolio and fully digitalised completion processes to optimally secure your performance claims and maintain your financial flexibility.
