A Performance Bond insurance is necessary after the winning of a tender if a public acquisition contract has been signed, contract that includes the obligation to conclude a performance bond insurance policy.
The Performance Bond insurance protects the partner of the Insured Party if the contractual obligations assumed are not accomplished or poorly fulfilled.
In addition, the Performance Bond guarantees to the Beneficiary that the contractual obligations stemming from the guaranteed contract are correctly carried out.
Performance Bond Advantages:
- Increased ease of execution of the contractual obligations;
- Unblocked sums that would have previously been used as a guarantee of adequate execution;
- Intact work capital, due to there not being a cash collateral requirement;
- Reduced time to issue the guarantee compared to bank procedures;
- Reduced costs;
In the case of public acquisition contracts, the Performance Bond is valid for the term of the offer, including the execution period and the fault notification period.
The maximum Insurance period is 60 months.
The contract signed between the two parties
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