Surety

Unlike insurance, this is a contract or an agreement drawn up by the insurance company (called surety) to guarantee the performance of an obligation or undertaking by another party (called principal, who is the insurance company’s client) in favor of another party (called obligee) to whom the principal has an obligation to perform. We have several surety bonds available depending on the needs of the business venture.

In surety bonds, the insurance company promises to answer financially to the obligee for the debt, default, or misconduct of the principal.

Required of contractors in connection with contracts for construction or for the supply of labor or such other service. Examples of contractor’s bonds are the bidder’s bond and performance bond.

Bidder’s Bond

A contract to supply material and equipment for construction work is placed for public bidding. The participants to such bidding are required to post a bidder’s bond, which guarantees that if the principal is successful in his bid, he will enter into a contract with the obligee.

Performance Bond

When a contract is awarded to a contractor to undertake construction work for the obligee, the contractor is required to post a bond which will guarantee that the principal (the contractor) will perform the job according to the terms and condition of the contract and within the period specified.

Filed in a court of law in accordance with a statutory requirement. Examples of judicial bonds are court bonds and fiduciary bonds.

Court Bonds

Filed by a party who is either a plaintiff or defendant in a litigation case that guarantees that he will honor or pursue the legal remedies of the courts.

• Attachment Bonds: When a complainant (plaintiff) in a legal case has attached the property of the defendant, the complainant is required to post this bond to guarantee that the surety will pay the defendant all his financial losses resulting from the attachment of his property should the plaintiff lose the case.
• Replevin Bond: Replevin is an action to regain possession of personal property. Before the supposed rightful owner-complainant can regain possession of the property, he must first post a replevin bond that answers for the return of the property or for the payment of damages to the defendant should it turn out that the complainant was not the real owner.

A fidelity bond promises to reimburse the employer (the obligee) for any loss of money or property that the employer might sustain due to the dishonest acts of the employee (the principal) named in the bond.

For more information, call our Client Service hotline (02) 8876 – 4400 or email us at teleservice@mapfreinsurance.com.ph