Suretyship is a relatively new line of business for Turkey, where the insurer acts as a guarantor for the debtor and provides collateral to the beneficiary specified in the policy. Although it is a new branch, surety capacity can be obtained both in the local insurance market and from abroad. It has various forms and the following sub-guarantee types are defined in the general conditions in Turkey:

  1. Advance Payment Guarantee: Provides coverage against the risk that the party receiving advance payment under a tender, project or goods and services trade fails to fulfill its obligations to the beneficiary and the advance is not repaid.
  2. Manufacturing / Maintenance / Repair Coverage: In cases where work performance is evaluated after the delivery of the work, such as construction, engineering or machinery production, it provides coverage against losses arising as a result of workmanship defects after a certain period of time following the delivery of the work.
  3. Breach of Trust Coverage: Provides coverage against losses incurred by the employer due to the acts of employees named in the surety bond, such as cheating, fraud, embezzlement, etc.
  4. Customs and Court Guarantee: It is a type of surety bond requested from the insurer to cover the public receivable that may arise due to a lawsuit, withdrawal of goods from customs or error arising from the customs clearance process, with tax offices, customs administrations and courts as beneficiaries.
  5. Tender Participation (Provisional Guarantee) Guarantee: Provides coverage against the risk that the policyholder leaves the tender before the completion of the tender, declines to sign the contract if it wins the tender, or fails to provide the collaterals required to be submitted within the scope of the tender.
  6. Payment Guarantee: Provides coverage against non-payment of payments to all subcontractors and workers.
  7. Performance Bond: Provides coverage against the risk that the project owner fails to fulfill its obligations in accordance with the terms set out in the contract. In the event that the insured fails to fulfill its obligations, the insurer may also agree with a new contractor to complete the work.
  8. Contract Coverage: Provides coverage against the debtor’s failure to properly fulfill its contractual obligations.
  9. Public tenders coverage: It is an unconditional, unconditional, definitive, primary, independent of the insured’s obligation, term, and includes a payment record at the first request against the risks that may cause the surety bond to be recorded as revenue in tenders subject to the Public Procurement Law No. 4734 and other relevant legislation. This coverage is provided within the attached clauses.
  10. Public receivables coverage: This type of coverage is unconditional, unconditional, definitive, absolute, primary, independent of the insured’s liability, indefinite, including payment at the first claim, against the risk of the insured’s failure to pay the public receivable in accordance with the Law No. 6183 on the Procedure for Collection of Public Receivables.

In the surety branch, we support the insurance company in the risk analysis process by providing documents, scoring and preliminary analysis in order to speed up the analysis process on the insurance company’s side, and by bringing together domestic and/or international capacities depending on the type of surety bond that will be required, we support the provision of the bond in a short time.