A Bid Bond insurance is necessary in order to participate at a tender for public acquisition, where a letter of bank guarantee or an instrument of warranty must be submitted, document issued according to the law, by an insurance company.
The Bid Bond represents an instrument of warranty by which an insurance company commits before the Beneficiary, on behalf of the Bidder, regarding the non-fulfillment of the following aspects::
• The Bidder has withdrawn the offer during its validity period;
• Subsequent to the establishment of the winning bid, the Bidder did not set up the performance bond guarantee, during the validity period of the offer;
• Subsequent to the establishment of the winning offer, the Bidder did not sign the public acquisition tender during the validity period of the offer;
BID BOND ADVANTAGES:
- Increased ease of participating in tenders for public acquisition
- Unblocked sums that would have previously been used as a participation guarantee
- Intact work capital, due to the there not being a cash collateral requirement;
- Reduced time to issue the guarantee compared to bank procedures;
- Reduced costs
The Insurance Contract is valid for the term of the offer, with the possibility of extension in exchange for an insurance premium paid by the Insured Party calculated for the period of the extension.
The maximum period for Insurance is 6 months.
Necessary Documents:
•The intermediate balance and its final version for the year when the evaluation request is submitted
- Application form
• Tender data sheet
• A model of the warranties instrument – if the Beneficiary so requires it
• The association agreement – only for associations
• Confirmation of the establishment of a counter-warranty: a guaranteed promissory note without tenor or a check file without an emission date on the insured sum – for the issuance of the policy
• Confirmation of payment of the insurance premium – for the issuance of the policy
