Surety insurance is an essential tool in the financial management of companies. It offers guarantees that ensure compliance with contractual and legal obligations, providing security to both clients and beneficiaries.

What is surety insurance?

Surety insurance is an insurance contract that guarantees compliance with obligations between two parties: the policyholder (company taking out the policy) and beneficiary (which receives the guarantee). Unlike other insurance policies, surety insurance does not cover direct payment commitments, such as loans; rather, it guarantees that the policyholder will comply with its contractual or legal obligations.

  • Parties Involved:
    • Policyholder: The company taking out the insurance.
    • Beneficiary: The party receiving the compliance guarantee.
    • Insurer: The insurance company that issues the policy.


Purpose of Surety Insurance Surety insurance acts as a safety net, ensuring that contractual and legal obligations will be fulfilled. Its main functions include:

  1. Compliance Guarantee: Ensures that the policyholder will comply with its obligations, such as the execution of works, supply of goods or provision of services.
  2. Replacement of Bank Guarantees: It provides an alternative to bank guarantees, freeing up credit capacity and improving the company’s financial management.
  3. Financial Protection: It provides assurance to beneficiaries that their interests are protected in the event of non-compliance by the policyholder.



Types of Surety Insurance Guarantees There is a wide range of guarantees, tailored to the needs of different sectors. Some types of guarantees include:

  1. Guarantees vis-à-vis the Public Administration: Provisional or tender, execution or final, and for stockpiling of materials or advances.
  2. Technical Sureties for Renewables and Storage: Guarantees of hybridisation, storage, dismantling, and EPC between private parties.
  3. Compliance with Contracts Between Private Parties: Required insurance for real estate developers and guarantees for leases, stockpiling, faithful performance, among others.
  4. Customs Guarantees: They insure the financial liabilities for import operations with customs authorities.
  5. Concession Guarantees: For new concessions or to replace existing bank guarantees with improved conditions.

Benefits of Surety Insurance

  • Increased Credit Capacity: It is not recorded in CIRBE, thus freeing up credit capacity and improving the management of funds.
  • Improved Cash Management: It optimises cash management by freeing up resources that would otherwise be tied up in bank guarantees.
  • Reduced Debt on the Balance Sheet: It helps to maintain a healthier balance sheet by not recording the surety insurance as debt.
  • Advantages over a Bank Guarantee: More flexible and less expensive, makes it possible to receive guarantees without affecting the company’s borrowing capacity.

Surety insurance is crucial for companies that want to meet their contractual and legal obligations without compromising their financial capacity. It offers numerous advantages over bank guarantees, and it improves cash management. RibéSalat, with its experience and customised solutions, can help you find the surety insurance policy that best suits your needs, ensuring your commitments are met and enhancing your company’s financial management.


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