Insurance of contract guarantees (bonds)

The Office du Ducroire may cover the bank guarantees the exporter has to arrange in favour of the buyer in order to guarantee his contractual obligations. In some cases, the beneficiaries under such guarantees can claim against them “on first demand” without having any proof of the exporter’s fault.

 

The Ducroire’s insurance of contract guarantees protects the exporter against both unfair calling of the bonds and calling due to a political event or decision.

 

Guarantees that fall within the scope of the cover are bid bonds, advance payment bonds, performance bonds, etc.

 

The exporter may be required to emit a bid bond when participating in a tender or public procurement, in order to assure the buyer against a possible withdraw of his contract offer or refusal to sign the contract once it has been awarded.

 

The advance payment bond enables the buyer to recover the down payment made to the exporter in case the contract should not, or only partly, be performed.

 

The performance bond is emitted in order to guarantee the buyer that the contract will be performed within the agreed timeframe and according to the terms of the contract.

 

The insurance of contractual guarantees is generally provided under a single and common policy together with the basic insurance for the export contract. For the insurance of bid bonds, however, a separate policy is drawn up.

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