Coverage
In a simplified manner, Commercial Surety or Commercial Surety Bonds can be understood as a warranty from a reliable source that lets your customers, suppliers, or partners know you have the capacity to complete a project or deliver goods, or deliver any other commitments and engamgents as specified in a contract.
The surety issuer takes on the liability of any default or failure on your part. If you fail to live up to the terms of the contract, the surety provides financial compensation to the beneficiary named in the Policy.
There are several types of commercial surety bonds. The most common types in Vietnam are:
- Maintenance bonds: guarantees that a contractor will remedy workmanship or material defects for a specified period.
- Warranty bonds: guarantees that a contractor will fix defective equipment or material should an issue arise during the time specified in the contract.
- Advance payment bonds: guarantees the contractor will pay the project owner back for any unamortized funds if the project is not completed.
- Performance bonds: protects the project owner in the event the contractor defaults on its obligations for delivery, function or quality under the bonded contract.
- Supply bonds: pays the contract owner for the cost of the missing and/or below standard materials If a supplier fails to deliver materials on time, up to the required agreed-upon quality standards or in agreed-upon quantity as outlined in the contract
- Judicial bonds: ensures a litigant pays the costs related to a legal action
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