BONDS
Insurance Bonds cover the loses and secures payments for the employer, in the event the entity who undertakes the construction and completion of a work is unable to carry out the required work, and does not refund the money he had collected in accordance to the agreed terms and conditions on the due date.

In this situation, the insurance company is assumed as the guarantor of the person or the institution obliged to carry out the required work against the employer.

The most extended coverage is the performance bond that normally involves several protections: Bid bonds, Performance bonds, Advanced Payment, Quality and Stability, Material…

There are other modalities of bonds such as costumes warrantees, tax refunds policies and judicial bonds, in which the obligee has to accomplish certain legal duties that are the matter of the coverage.
CONTRACT BONDS
Contract bonds guarantee a specific contract.

The most commonly used kinds are :

• Bid Bonds,
• Performance Bonds,
• Advance Payment Bonds,
• Supply Bonds,
• Material Bonds,
• Fidelity Bonds,
• Maintenance Bonds,
• Retention Money Bonds,

and others prepared due to need or demand.

BID BONDS
It is common business practice when tendering for large capital projects for the tender to be supported by a Bid Bond.

The Bid Bond is an indication of contractor company’s ability to carry out the work being tendered for and may proceed to Performance Bonds for the successful tenderer.

It is also used as a financial fall-back in the event the successful contracting party is unable to carry out any part of the tender as submitted and it becomes necessary to place the project, or part of it, out for tender again. In such cases the Bid Bonds cover the cost of the new tender, and the difference between the old and new tender if there is any.
ADVANCE PAYMENT BONDS
The advance payment bond will cover the all losses if;

• the money tendered to the contracting company is used for other than the tender, and

• can not be collected by the tenderer itself.
PERFORMANCE BONDS
The Performance Bond is an indication that a contractor company has the necessary skills and capabilities to carry out the required work and comply with the agreed terms and conditions of the contract.

It also demonstrates to the contracting party that the tenderer has the required skills and financial strength to complete the contract.

Performance Bonds secures payment for the beneficiary (the contracting party) in the event the contract is not fulfilled.