SURETY INSURANCE
With the amendment made in the Public Procurement Law No. 4734 published in the Official Gazette dated December 05, 2017, companies were allowed to present the bail bonds issued within the scope of the bail insurance instead of the bank letter of guarantee while participating in the tenders, and it was regulated that the surety bonds issued by the insurance companies residing in Turkey within the scope of the surety insurance can also be given as a letter of guarantee in the tenders and tenders.
With the amendment made in the Public Procurement Law No. 4734 published in the Official Gazette dated December 05, 2017, companies were allowed to present the bail bonds issued within the scope of the bail insurance instead of the bank letter of guarantee while participating in the tenders, and it was regulated that the surety bonds issued by the insurance companies residing in Turkey within the scope of the surety insurance can also be given as a letter of guarantee in the tenders and tenders.
You can take out insurance without touching your limits/collaterals in banks with “Bail Insurance”, which is an alternative to bank guarantee letters.
Surety Insurance is an insurance contract in which the insured person is obliged to indemnify the corresponding indemnity in case of breach of his/her legal or contractual obligations.
Its types are as follows;
- Participation in the Tender (Temporary) Coverage
- Advance Payment Coverage
- Performance Coverage
- Manufacturing/Maintenance/Repair Coverage
What are the Important Criteria?
- Financial structure of the company (financials of the last 3 years should be shared.)
- Type of tender to be entered
- The way companies work with banks
- According to which law the tender is issued
- Specification
The insurer may be a guarantor for the debtor against the beneficiary by direct surety or by indirect surety, depending on the bank, credit guarantee institutions or other financial institutions being sureties against the beneficiary for the debtor’s liability.
Who is the surety insurance for?
- Tenders for the delivery of goods or products,
- Tenders for the service to be provided,
- Public tenders
How Does the Insurer Pay the Cover?
With the surety insurance contract, the insurer provides a guarantee to the beneficiary specified in the policy as a guarantor to the debtor, within the framework of the terms and conditions specified in these general terms and policy special conditions, against the risk of the debtor not being able to fulfill his/her debt obligation defined in the policy. The insurer makes payments to the relevant beneficiary or beneficiaries pursuant to its obligation under this insurance contract.
