Performance Guarantee Bond - Ziggurat V HCC Insurance Co

The defendant insurer issued a performance guarantee bond to the claimant employer and a dispute arose when a contractor stopped work on the site. The bond provided that the insurer guaranteed that, in the event of a breach of contract by the contractor, it would discharge any losses sustained by the employer. Clause 2 (which was a "homemade addition") provided that "the damages payable under this Guarantee Bond shall include...any debt or other sum payable to the Employer under the Contract following the insolvency...of the Contractor". The issue in this case was whether a breach of contract was required to trigger liability under clause 2. Coulson J held that it was not: "Under a building contract, the employer does not care about the precise way in which the building contractor has become insolvent, or the nice distinctions between...