Guarantee insurance


Atlantik Sha: Guarantee insurance

Guarantee insurance means that you get a guarantee from an insurance company instead of a bank. This frees up the bank's guarantee limit for your company's growth investments, for example. Guarantee insurance is most commonly used in the construction industry and in connection with the manufacture of investment goods. Guarantee insurance is intended for situations where, for example, the terms of the contract require collateral or guarantees.

What is guarantee insurance and how does it work?

Guarantee insurance is a good alternative to bank guarantees. Companies use guarantee insurance as security doing business both in domestic and international business. Our insurance agents know the market well and can assess for you what kind of guarantee insurance your company needs. If you wish, we can also handle the guarantee limit to ensure the best conditions for tendering. 

When you are considering guarantee insurance, it is definitely advisable to use an experienced insurance broker. They can assess the reasonableness of the price level in relation to the need for price negotiations.

Issuance of guarantee insurance

Guarantee insurance policy generally works the same way as a bank guarantee does. Guarantee insurers grant their client a guarantee limit from which individual guarantees can be written quickly and flexibly. 

The granting of a guarantee insurance is based on an analysis of the company's financial position and future prospects. Insurance guarantee needs also have an impact on pricing.

The most typical guarantee insurances issued by our insurance company are:

  • Offer guarantee for various entities that participate in tenders.
  • Contract guarantee for various entities that participate in tenders.

For contract guarantees, we offer you a discount of 30% from the basic fees according to the guaranteed amounts and the insurance period.

In addition to guarantee insurance we provide services related to e.g. risk management and credit insurance. Please don't hesitate to contact us and ask more about our services!

Where do you use guarantee insurance?

Guarantee insurance is well-known especially in the construction and manufacturing sector. Depending on the projects, you have various types of guarantees. It may be in the construction sector, where a contractor must provide a guarantee in favor of the owner. Or it may be in the manufacturing sector, where a supplier must provide a guarantee in favor of the buyer. In both cases, the guarantee secures that the work is completed in accordance with the contractual terms. And if not, that you are consequently compensated for the possible loss.

Guarantees in the construction sector

A performance bond protects the owner from losses, if the contractor fails to fulfil his contractual obligations. The owner will be paid the amount covered under the bond and can use it to have the work completed.

If the work has been completed and defects are found during the maintenance period, the owner can call the bond. The amount covered under the bond can be used to remedy the defects. There are several industry standards available depending on which country you need the guarantee to be issued. 

Guarantees in the manufacturing sector

Guarantee insurance is also seen in connection with deliveries from industrial enterprises, where the buyer wants to secure compensation for advance payments made to a supplier. If the supplier does not fulfil the contract by delivering the agreed materials, the bond can be called. 

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