Special Features of Construction Companies' Financial Statements

Securities for Defects Liabilities

When the construction company has fulfilled its contractual obligations and has completed the construction, the client is usually granted a longer-term defects liability period for which the construction industry has also found a suitable security tool.

Securities for defects liabilities are usually provided in the amount of five percent of the contract value for a period which depends on the defects liabilities deadlines ranging between two and five years. All types of securities which are outlined here are employed. In addition, insurers traditionally offer to furnish securities for construction companies' defects liabilities obligations.