Surety is a contractual triangle relationship where we vouch with our good name towards third parties for your obligation as a contractor.
A principle for Surety is to indemnify a person who has no mutual relationship to the insurance company (external party).
The bond or guarantee secures that the contractor (your company) will fulfil its obligations (or defects liability) under the contract.
HOW DOES SURETY WORK?
An EH bond issued within the underwriting criteria you will be able to tender for a contract knowing that credit lines with your bank are not affected. This means that borrowing facilities and working capital are safeguarded enabling you to plan ahead in the confident knowledge that you have the capability to carry out the contract and provide the bond – a distinct advantage over a competitor who does not have this facility.
Standard types of bonds/guarantees include:
- Contract Performance Bonds: to secure the proper performance of a contractual obligation.
- Maintenance Bonds: to secure the elimination of deficiencies during a warranty period of a contractual obligation.
- Bid Bonds: to secure the reliability of an offer in a tendering process.
- Advance Payment Bonds: to secure the proper use of advance payments for a contractual obligation.
- Off site Materials Bonds: to secure goods or materials produced and held off site where the goods or materials are unavailable when required for an incorporation into the contract.
- Retention Release Bonds: to secure retention funds held for performance of the contract.
Euler Hermes does not provide financial guarantees.