19/08/2026
๐๐ผ๐ป๐๐๐ฟ๐๐ฐ๐๐ถ๐ผ๐ป ๐๐๐ฎ๐ฟ๐ฎ๐ป๐๐ฒ๐ฒ ๐๐ป๐ผ๐๐น๐ฒ๐ฑ๐ด๐ฒ ๐ฆ๐ฒ๐ฟ๐ถ๐ฒ๐ | ๐๐ฝ๐ถ๐๐ผ๐ฑ๐ฒ ๐ญ
๐จ๐ป๐ฑ๐ฒ๐ฟ๐๐๐ฎ๐ป๐ฑ๐ถ๐ป๐ด ๐ฆ๐๐ฟ๐ฒ๐๐๐๐ต๐ถ๐ฝ / ๐๐ฐ๐ฐ๐ฒ๐๐๐ผ๐ฟ๐ ๐๐๐ฎ๐ฟ๐ฎ๐ป๐๐ฒ๐ฒ๐
๐ก๐ผ๐ ๐ฎ๐น๐น ๐ด๐๐ฎ๐ฟ๐ฎ๐ป๐๐ฒ๐ฒ๐ ๐ผ๐ฝ๐ฒ๐ฟ๐ฎ๐๐ฒ ๐ถ๐ป ๐๐ต๐ฒ ๐๐ฎ๐บ๐ฒ ๐๐ฎ๐.
A common misconception in construction and infrastructure projects is that the title given to a guarantee determines its legal effect.
The reality is different.
The wording of the guarantee and its relationship with the underlying contract determine whether the guarantorโs obligation is accessory to the contractorโs liability or operates as an independent undertaking.
A Suretyship / Accessory Guarantee generally links the guarantorโs liability to the contractorโs obligations under the underlying contract. Subject to the specific wording of the guarantee, the contractorโs default and the amount recoverable generally need to be established before the guarantor becomes liable.
Understanding this distinction is important for all parties involved in construction projects:
โ Employers โ when selecting appropriate project security
โ Contractors โ when assessing financial exposure and guarantee obligations
โ Consultants and Engineers โ when reviewing contract requirements
โ Financiers โ when evaluating project and contractual risk
In Episode 1 of our Construction Guarantee Knowledge Series, we explore:
๐ What a Suretyship / Accessory Guarantee is
๐ How the claim trigger operates
๐ How liability is determined
๐ How it differs from an On-Demand Guarantee
๐ Why guarantee wording matters
At GM Financial Services, we believe informed decisions create stronger projects.
Our role is to help stakeholders understand the contractual trigger, financial exposure and practical implications before a guarantee is issued or accepted.
Read the wording.
Understand the trigger.
Know the risk.
Follow our Construction Guarantee Knowledge Series as we unpack the different guarantee structures and their impact on construction projects.
Disclaimer: This publication is intended for general information and educational purposes only. It does not constitute legal, contractual, financial, insurance or professional advice. Guarantee obligations and remedies depend on the specific wording of the guarantee, the underlying contract and applicable law.
