Surety Insurance, also called guarantee insurance, is an insurance contract by which the insurer is obliged, in case of breach by the policyholder of its legal or contractual obligations, to indemnify the insured by way of compensation or penalty the suffered patrimonial damages.
We distinguish up to three intervening parties in surety insurances. On the one hand, the insured, it is said, person who receives the compensation in the case that the policyholder fails to comply with the obligations stipulated in the contract. The second actor that intervenes in this type of insurance is precisely the policyholder, who signs the agreement with the insurer, that is, the insurance company. And finally, our third actor, the insurance company that ensures that the policyholder fulfils his obligation.
What is surety insurance?
The surety insurance is an alternative to the bank guarantee and presents a series of advantages in relation to it. Both fulfil their purpose, which is none other than to serve as a guarantee for the fulfilment of a series of obligations contracted by the policyholder. If the latter does not comply with the agreed conditions, the insurer will be responsible for the corresponding compensation.
Surety Insurance or Bank guarantee? As we have mentioned before, there are some benefits when contracting a bond policy that makes this a perfect substitute for the bank guarantee. One of these benefits is that the insurance does not compute in CIRBE, the Central Risk Information. CIRBE is a huge database where information is recorded from credit institutions about the risks they have with their customers.
In addition, in the surety insurance conditions are more flexible and we will not have to pay for study, opening or cancellation expenses.
On the other hand, although this insurance is more present in the signing of contracts with public administrations, where the contracting party is the contractor and the insured is the public administration, it should be noted that its scope of application is not delimited and the companies they can also guarantee guarantees between private entities.
Surety insurance modalities
These policies tend to occur more frequently in contracts for the supply or execution of works. Depending on the origin of the obligation that the policyholder must guarantee, there are different types of insurance policies that we can offer you:
- Storage Material Guarantee
- Amounts Consolidation Guarantee
- Bidding Guarantee
- Renewable Energies Guarantee
- Judicial Guarantee
- Guarantee of Execution of the Contract
- Maintenance Guarantee
- Special Taxes Guarantee
- Real Estate Agent Guarentee
- Tax Deferral Guarantee
- Security Companies Guarantee
- Guarantees for Insurance Agents