Surety bonds insurance
MNK Re provides access to surety bonds and guarantees across a wide variety of trading sectors. Bonds are designed to provide independent security to customers against losses or damage suffered as a result of their contractors or suppliers breaching their contractual obligations.
A bond supports your contractual obligations to another party. In the event of non-performance of the specified obligations, we are there to provide compensation for loss and damage. When using a surety bond, your working capital arrangements are not affected and our financial strength often means that our bond or guarantee is seen as a preferred product. Surety bonds include contractual bonds, such as performance and advance payment bonds, as well as commercial bonds, such as tax appeal bonds and payment bonds.
A surety bond or guarantee is a written obligation provided by a guarantor (a bank or insurer) covering the beneficiary (such as an employer on a construction contract) against the default of the bonded or guaranteed company. It secures the fulfillment of contractual, commercial or legal obligations. A surety bond or guarantee is distinctive from a traditional insurance contract in that the guarantor holds recourse rights against the bonded or guaranteed company and can recover any payment made under the bond from that company. An increasing proportion of public and private contracts today require security, such as a surety bond or guarantee, for contractual obligations. The regular need for these products can reduce the availability of bank credit lines and impact the financial flexibility required for working capital purposes and to finance investments.
How surety bonds work
There are three parties involved in a surety bond: the principal, the obligee, and the surety.
Types of surety bonds and guarantees