Financial Guarantees

One of our specializations is financial insurance programs.

Financial guarantees as security in tenders

Do you run a business and participate in tenders that require security? Want to be a credible business partner? Are you focused on growing your company while maintaining a stable financial situation?

Take advantage of Polish Brokers Group's experience in navigating the guarantee market, and in return for your trust, you will receive properly negotiated conditions that provide comfort and flexibility, thus contributing to the development of your company.

Contractual guarantees are a common way to secure contract fulfillment, allowing the company not to freeze its own financial resources for new investments.

If your company has previously provided contract performance security in cash or as a cash block on the account, we can help replace it with a guarantee and release the frozen cash.

We secure every stage of contract execution:

1. Tender - Bid payment guarantee
2. Contract conclusion - Performance bond
3. Contract execution - Advance payment guarantee
4. Post-execution period - Warranty bond

Bid payment guarantee

The bid payment guarantee allows the entrepreneur to participate in many tenders at one time without engaging their own money. The cost of this guarantee is small, and submitting multiple bids increases the likelihood of winning a contract. The guarantee commits the guarantor to pay a specified amount if the tender participant fails to meet the obligations from participating in the tender.

Performance bond

This is issued at the request of an entrepreneur who wins a tender.

It obliges the Guarantor to pay a specified amount in case of non-performance or improper performance of the obligations by the contractor, who refuses to repair the damage resulting from the contract. This guarantee allows the contractor to free up cash, and it is used in carrying out investments or sales, delivery of goods. The content of the guarantee can be largely adapted to the individual requirements of the beneficiary.

Advance payment guarantee

This guarantee is used when the investor transfers money to the contractor for the purpose of executing the contract. The guarantor then commits to paying the guarantee sum if the contractor misuses the transferred amount, does not account for it, or is unable to return it in case of non-fulfillment of obligations, e.g., due to the contractor's bankruptcy.

Warranty bond

Issued at the request of an entrepreneur, it constitutes the Guarantor's obligation to pay for the contractor's obligations arising from the contract in case the contractor fails to remedy defects or faults after completion. The content of the guarantee can be adapted to the individual requirements of the beneficiary.

Combined performance and warranty bond

This guarantee combines the two previously described guarantees in one guarantee document. The Guarantor secures claims against the beneficiary of the guarantee both for proper execution of the contract and for the removal of defects and faults. Beneficiaries/Orderers often already specify in the significant order specifications the need to provide security for these two risks, which is why the above guarantee is often used. A great benefit for the contractor in the case of using the above guarantees is the certainty that after the period of proper execution of the contract, regardless of the current financial situation of the Client, he will have ensured security for the period of removing defects and faults after the investment is completed.

Advantages of Insurance Guarantees over Bank Guarantees

Insurance Guarantees and Bank Guarantees are two different financial instruments used to secure various types of transactions or obligations. Here are some advantages of Insurance Guarantees over Bank Guarantees:

1. Flexibility of Terms: Insurance guarantees often offer greater flexibility in terms of conditions and coverage scope. This allows for better customization to the client's specific needs.
2. Lower Costs: Insurance guarantees can be cheaper compared to bank guarantees, as the insurance sector often has less stringent collateral requirements and can offer more competitive rates.
3. Lesser Balance Sheet Impact: Insurance guarantees usually are not recorded in the client's balance sheet as a liability, which can be beneficial for balance sheet management and the company's credit capacity.
4. Faster Issuance Process: The process of obtaining an insurance guarantee is often faster and less complicated than obtaining a bank guarantee, which is particularly important in situations requiring swift action.
5. Variety of Products: Insurers offer a wide range of guarantee products that can be tailored to specific industry or project requirements, giving clients more freedom to choose.
6. Lower Collateral Requirements: In the case of insurance guarantees, the requirements for collateral are often less stringent than for bank guarantees, which can be beneficial for companies with limited collateral possibilities.
7. Accessibility for Small Businesses: Small and medium-sized enterprises can more easily obtain insurance guarantees, as they are not as restrictive in assessing creditworthiness as banks are.