SID Bank - Insurance - Export credit insurance - Insurance of bank guarantees

Insurance of bank guarantees

In international business operation, particularly in export of equipment, performance of investment work etc., it is an established practice for the buyer to require from the exporter adequate guarantees for coverage of risks on exporter's side (i.e.: bid bond, performance bond - for good execution of works, advance payment bond, warranty bond, retention money bond).

These guarantees are often a prerequisite for the exported to obtain the business. Guarantees, issued mostly by first-class banks and other financial institutions upon order of originator, are issued in content and form as required by beneficiaries and therefore efficiently protect them against commercial risks, and have to be provided by the exporter - the opposite party of the original agreement.

The exporter and exporter's bank (the latter in case exporter is insolvent or the given guarantees fail to cover its recourse) face certain risks in connection to guarantees in international trade, which they can insure at SID Bank. Part of these risks can be transferred to the insurer - SID Bank - with insurance against unfair calling and calling of guarantees due to political and other non-commercial risks.

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