Surety bonds are not insurance policies, but rather a credit instrument. They are intended to protect the beneficiary from breach of an obligation contracted by the principal debtor.
The field of construction is one where the use of surety bonds are most frequent. The guarantor undertakes to the owner or prime contractor that the contractor performs the agreed contract. A financial guarantee is planned and will be granted by the deposit if the contractor fails to fulfill his commitment.
The advantages of deposits:
- Replaces cash as collateral;
- Is a good guarantee of contract performance;
- The deposit has the task of selecting the contractors;
- The creditworthiness of the deposit protects the owner;
- The deposit promotes healthy competition.
Our insurers have strong experience in this business; we can help you obtain the necessary approvals and check whether the documents meet your contractual obligations.