The Surety Bond, is an additional guarantee instrument that will be implemented in Mexico as of this year and will exist in harmony with the Sureties, which have been used for a long time by our country to guarantee compliance with certain obligations and contracts.
Its main objective is to ensure that the obligations established in a contract are met to the letter, otherwise, the insurance company with which this insurance is processed, will cover the resulting losses.
Unlike a Surety, the Surety Bond does not require a solidary obligation to be issued, which in some way facilitates the hiring process, however, due to the risk that this implies, the cost of its issuance may reach be up to 3 times greater than the Bail. Being a security instrument, the Surety may only be issued by the Underwriters Surety and Bonding through intermediaries.
One of the main benefits of this product is the guarantee and security it provides to individuals and corporations when doing business, since the insurance company will cover the losses that result when a breach occurs in the contract. In case this happens, the claim is issued, the documents provided in the certificate are presented and the payment will be made after 30 days.
The Surety Bond, will be an excellent alternative of guarantee for those who look for to assure the fulfillment of some contract and do not count on a solidary obligation, as they would have to do it when contracting a Bond. For this reason, it is expected that the Surety Insurance plays a very important role in the economy of our country and is really beneficial for those who have the need to ensure that any obligation is fulfilled.