In public tenders and private sector contracts, the contractor is expected to provide a guarantee that it will fulfil its obligations. Meeting these requirements with bank letters of guarantee uses up your company’s credit lines and can limit your capacity to take on new projects. Surety insurance provides the same assurance through the insurer’s undertaking, allowing you to keep your financing resources for your core business. This gives you greater flexibility in your growth plans.
Under the surety bond accepted within the framework of public procurement legislation, your bid bond, performance bond and advance payment bond requirements can be met. In private sector contracts, this solution can likewise be structured around the guarantee types the employer requires, giving you an alternative to letters of guarantee and more flexibility in managing cash flow and banking relationships. Surety bonds are issued in line with the requirements of the relevant authorities and employers.
Who is it for?
- Construction, contracting and engineering firms bidding in public tenders
- Suppliers participating in tenders for goods and services
- Contractors required to provide guarantees to employers in private projects
- Companies wishing to reserve bank credit lines for operational financing
Scope of cover
- Bid bond: the guarantee required from bidders at the tender stage
- Performance bond: guarantee that the contract will be performed in accordance with its terms
- Advance payment bond: assurance for repayment of advances paid by the employer
- Alternative to letters of guarantee: surety bond accepted under public procurement legislation
- Private sector contracts: structured around the guarantee types the employer requires
- Other bond types: optional solutions assessed according to project and contract needs
Scope of cover, limits and deductibles are determined by the insurer’s general and special conditions; the final scope is set out in the policy.
The Proxima Brokers approach
In surety, insurers assess your company’s financial structure and track record to set a surety facility limit. We help you prepare your financial statements and project portfolio for this assessment and lead negotiations with the market for limit allocation. We check that the bond wording matches the tender specifications and contract, and update your facility regularly in line with new projects.