Surety insurance protects your projects

‘When you can’t trust a person, then a contract is useless.’ Oil tycoon Jean Paul Getty pinpointed the foundation of all business relationships: trust. But clients and contractors increasingly do not know each other personally – be that because the number of potential trading partners is rising due to increasing competition, the business relationship is still new or the client and contractor operate on different continents. When the client does not know its potential partner well, it cannot assess the quality and reliability of that partner. The client wants to avoid the risk of financial loss or inadequate service – especially when the transaction in question is big.

A guarantor with unquestionable creditworthiness can overcome this potential obstacle to business. Instead of providing an amount of money, the guarantor puts forward its own creditworthiness. Sebastian Kentenich, Head of Credit Insurance at Funk, shares his knowledge: ‘Many industrial and commercial companies still only allocate the majority of their contracts with bonds that protect the performance of the contract or the warranty. Public procurement clients are even legally required to ensure that every allocated contract is subject to recoverable bonds. What’s more, specific bonds are increasingly being sought out, such as waste shipment or customs bonds.’