Surety Bond
The amendment to the Public Procurement Law No. 4734 published in the Official Gazette dated 5 December 2017 allowed companies to submit surety bonds issued within the scope of surety insurance instead of a bank letter of guarantee when participating in tenders, and it was regulated that surety bonds issued by insurance companies resident in Turkey within the scope of surety insurance can also be submitted as a letter of guarantee in tenders.
With "Surety Bonds", which is an alternative to bank letters of guarantee, you can get insurance without touching your limits / collaterals in banks.
Surety Bond Insurance is an insurance contract under which the insured is obliged to indemnify the corresponding indemnity in the event of a breach of legal or contractual obligations by the insured. Its types are as follows:
Tender Participation Guarantee (Provisional)
Advance Payment Guarantee
Performance Guarantee
Manufacturing/Maintenance/Repair Guarantee
What are the Key Criteria?
Financial structure of the company (Company financials for the last 3 years must be submitted)
Type of tender to be participated
The way companies work with banks
Under which law the tender is organised
Specifications
The insurer may guarantee the obligor against the beneficiary either by direct suretyship or by indirect suretyship, whereby banks, credit guarantee agencies or other financial institutions guarantee the obligor against the beneficiary for the obligor's liability.
Who is Eligible for Surety Insurance?
Tenders for the delivery of goods or products
Service tenders to be awarded
Public tenders
How does the Insurance Pay for the Coverage?
With the surety insurance contract, the insurer provides coverage to the beneficiary specified in the policy as a surety to the obligor against the risk that the obligor fails to fulfil the debt obligation defined in the policy within the framework of the terms and conditions specified in these general terms and policy special terms. The insurer shall make payments to the relevant beneficiary or beneficiaries in accordance with the obligation undertaken under this insurance contract.