Insurance Products
Surety Bond Insurance (Alternative to Bank Guarantees)
Surety bond insurance is a guarantee instrument issued by an insurer in place of a bank letter of guarantee — securing your obligation without cash collateral or use of your credit line.
At a glance
- Status
- Optional
- Core cover
- 5 sections
- Quote turnaround
- Same business day
Public and private sector tenders require bid, performance and advance payment guarantees. Providing these through bank letters of guarantee blocks the company's credit line and constrains cash management. Surety bonds serve the same legal function while leaving the credit line free — a meaningful advantage for growing firms bidding on several tenders at once.
Under Public Procurement Law No. 4734, surety bonds are accepted as valid guarantees. Bonds can be issued for bid guarantees, performance guarantees, advance payment guarantees and customs obligations. Compliance with the format and duration specified in the tender documents is essential.
Underwriting is based on the company's financial statements, operating history and contract performance. The insurer performs a credit assessment and requests the balance sheet, income statement, work completion certificates and a list of ongoing commitments. With a well-prepared file the process can conclude noticeably faster than a bank guarantee.
What Is Covered
- Bid bond
- Covers the provisional guarantee required at the tender participation stage.
- Performance bond
- Provides the definitive guarantee required after the contract is signed.
- Advance payment bond
- Secures repayment of advances paid by the employer.
- Customs and tax surety
- Covers guarantees required for customs procedures and tax obligations.
- Maintenance and warranty bond
- Covers obligations during the warranty period after delivery of the work.
Who Is It For?
- Contractors bidding on public and private sector tenders
- Construction, contracting and infrastructure firms
- Growing companies preserving their bank credit lines
- Importers requiring customs and tax guarantees
What Is Not Covered
- Firms without an allocated surety limit or sufficient financial standing
- Obligations outside the contract and not declared
- Unjustified demands arising from deliberate contract breach
- Guarantees relating to repayment of financial credit
What Affects the Price
Premiums vary between insurers according to the factors below. We compare 27 partner insurers to find the best fit for your profile.
- Financial position and credit assessment of the company
- Requested bond amount and duration
- Nature and risk of the underlying contract
- Track record of contract performance and completion
Frequently Asked Questions
Are surety bonds accepted in tenders?
Yes. Under Public Procurement Law they are accepted as valid guarantee instruments.
How do they differ from bank guarantees?
Surety bonds do not consume your bank credit line or require cash collateral, preserving financial flexibility.
What documents are required?
Typically the last two years of financial statements, activity certificate, work completion certificates and a list of ongoing commitments.
How long does the process take?
With a complete file, assessment can conclude within a few business days, after which bonds are issued quickly.