The insurance guarantee belongs to the financial insurance group, but differs from the standard insurance. The guarantor is the insurer who undertakes to provide a specific cash benefit in the event that the guarantee applicant fails to fulfil the obligation assumed. The guarantee is dedicated in particular to entrepreneurs who perform all kinds of contracts and participate in tenders.
Having a signed agreement for granting an insurance guarantee allows the entrepreneur to move freely in the market realities without any additional involvement of his resources during the implementation of contacts. It allows for the provision of financial security required by the Investor, thanks to which a part of your remuneration is released, which would otherwise have to be used to secure the contract.
An insurance guarantee increases the credibility of an entrepreneur on the market, because it provides certainty of performance of an obligation – the Insurer first of all takes over the claims of the beneficiary, must meet the obligation of the guarantee applicant under the terms of the guarantee agreement.
An additional advantage of insurance guarantees is the fact that the financial performance of the company is confirmed by an external body which provides a surety for the guarantee applicant. This is due to the fact that if the guarantee obligation is paid out by the insurance company, there is an automatic recourse and the guarantee applicant is obliged to reimburse the Insurer for the fulfilment of the obligation towards the beneficiary of the guarantee.