What are the advantages of gluing the warranty?

Bonding of liability is a cheap way to guarantee that the work will be done until the specifications in the assigned time frame. The main benefits for suppliers are their low costs, which release their assets to tie the work of work, which would seriously reduce their ability to exercise more jobs. From the customer's point of view, the gluing of the warranty means timely payment to return to the way back if suppliers cannot fulfill their contractual obligations. Another advantage, often overlooked, is that the warranty bond can be written to guarantee the customer's payment to the supplier. They can be used for work performance such as snuff or installing plumbing vehicles into a structure or timely and complete supply of stocks, equipment or other goods. In some cases, a contract is required and in other cases the government is required as a prerequisite for issuing a business license. Companies whose trade licenses require them to be connected often advertise this SKFunction as an illustration of their reliability and integrity.

There are three parties to the warranty bond: obligation or customer; Director or supplier; And certainty, which is a society that gives a bond. If the director asks for sure, the warranty examines the application in almost the same way as the loan application is reviewed and examines the history of previous performance, credit history and financial stability of the director. The director applies to a bonus that is determined on the basis of a security investigation, and is usually a small percentage of 1% to 5%-from the total bond amount, although higher risk bonds can cost up to 20% of the bond.

The relatively low cost of gluing liability is one of its main benefits. Without a bond, it would be a mandatory justified requirement to undertake its own resources and secure them in the Accreditation (LC) to guarantee performance. This would store a difficult burden for all except the largest PRIn most cases, the incations and in most cases would unnecessarily combine a huge amount of money for a long time, as the mandatory may be entitled to poor performance long after the work is completed. An alternative approach to renewing money in case of insufficient performance is that the mandatory to carry out legal steps, a costly and time -consuming process, which is often an exercise of futility, especially if the director is failed.

If the obligation to file an action against the warranty union due to the alleged insufficient performance of the director, the warranty will investigate the entitlement and, if justified, will pay the obliged person. As soon as this happens, the warranty strives to repay the claim and any related costs from the principal. Thus, the theme warranty is not an insanpolitics of CE; It's a credit agreement. When purchasing a guarantee volume, the principal will basically arrange a short -term loan from security in case of insufficient performance. This is one of the reasons for a thorough examination of the warranty application; Certainty wants to be certain that the director can satisfy any demands that security may have to payIT.

The gluing of the warranty is therefore a valuable tool for ensuring the performance of the contract, but there are many other types of security. Call commercial warranty bonds usually fall into one of the three categories: License and License of Bonds required by Governments before the license or permit; law bonds such as bail bonds and trust bonds; and public official bonds issued to guarantee faithful and honorary work of elected and mentioned public officials, such as police and officials of the Ministry of Finance. Bonds that do not fall into these categories, such as those that guarantee self -insurance, can be correctly categorized as "different" commercial warranty bonds.