Surety Bonds
The mail types of surety bonds include the following:
Bid bond
The Bid Bond is the guarantee instrument required of any bidder participating in a procurement procedure for a public procurement contract, and is intended to protect the Contracting Authority against any inappropriate conduct from the bidder, over the entire validity of the bid submitted to the conclusion of the public procurement contract, or the framework agreement.
The insurer, as guarantor, is bound unconditionally and irrevocably to the beneficiary (Contracting Authority) to pay the indemnity, within the limit of the insured amount, in case of the insured risk.
The value of the warranty for participation in the auction is maximum 2% of the estimated value of the contract.
Bid bond
The Bid Bond is the guarantee instrument required of any bidder participating in a procurement procedure for a public procurement contract, and is intended to protect the Contracting Authority against any inappropriate conduct from the bidder, over the entire validity of the bid submitted to the conclusion of the public procurement contract, or the framework agreement.
The insurer, as guarantor, is bound unconditionally and irrevocably to the beneficiary (Contracting Authority) to pay the indemnity, within the limit of the insured amount, in case of the insured risk.
The value of the warranty for participation in the auction is maximum 2% of the estimated value of the contract.
Advance payment bond
The Advance Payment Bond is required from the Contractor in order to protect the Beneficiary against the risk of non-repayment of the advance paid by the Beneficiary, in case the Contractor fails to fulfill itss obligations and fails to justify the advance it received.
The Insurer undertakes conditionally and irrevocably to pay or execute any claim entitled to payment of damages in favor of the Beneficiary, within the limit of the created damage, but not more than the limit of the amount insured, if the Executor is obliged to return the advance because he is guilty of non-fulfillment or inadequate fulfillment of the obligations stipulated in the Contract.
The amount insured shall be reduced proportionately to the value of each stage of the project (delivered, executed, etc.) executed and confirmed in accordance with the contract's provisions, if that benefit is part of the guaranteed obligations and the value of each payment made by the Guarantor.
Performance bond
The Performance Bond is a surety bond issued by an Insurance Company or a bank to guarantee satisfactory completion of a project by a Contractor.
The Insurer undertakes conditionally and irrevocably to pay or execute any claim entitled to the payment of damages in favor of the Beneficiary, within the limit of the created damage, but not more than the limit of the insured amount, if the Executor does not fulfill, he fails, lately or inadequately performs the obligations stipulated in the Contract.
The value of the performance bond is of up to 10% of the estimated value of the contract or of 5% of the SME.
Maintenance bond
The Maintenance Bond is a type of surety bond purchased by a contractor that protects the owner of a completed construction project for a specified time period against defects and faults in materials, workmanship and design that could arise later if the project was done incorrectly.
Retention bond
Although a Maintenance Bond is not technically an insurance, it functions as an insurance policy on a construction project to make sure a contractor will either correct any defects that arise or that the owner is compensated for those defects.
The value of the maintenance bond is set according to the value of the performance bond, which is reduced by 30% of the value of the performance bond at the project’s completion.
The Retention Bond is a type of surety bond that protects the Beneficiary after a job or project is finished. It guarantees that the Contractor will carry out all necessary work to correct structural and/or other defects discovered immediately after completion of the contract, even if full payment has been made to the Contractor.
The Insurer undertakes unconditionally and irrevocably to pay or execute any claim entitled to payment of damages in favor of the Beneficiary, within the limit of the damage created but not more than the limit of the amount insured, if the Executer does not fulfill, fails to fulfill or lately/ inadequately performs the obligations stipulated at the project’s completion stage.
Contractual Guarantees
Bid Bond p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 12.0px Arial; -webkit-text-stroke: #000000} span.s1 {font-kerning: none} A bid bond is…
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Commercial loan
The need of financial insurances is determined by the fact that the commercial activity is, by definition, submitted to various risks. Each…
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