Frequently askedquestions

What is surety bond?
A surety bond is a three-party agreement in which theinsurer (guarantor) provides a guarantee to the party who
receives the benefit of the bond (the beneficiary), that athird party (the principal) will meet its contractual, legal, orregulatory obligations.
A surety bond is therefore a commitment from the guarantor(Atradius) to the beneficiary to stand in when the primarily
obliged party, the principal (our customer) fails to perform
on a contractual obligation or in respect of a regulation
requirement.
What is the difference between a surety bond and a bankguarantee?
Although banks have been traditionally used for guarantees,
surety bonds issued by insurance companies have proven tobe equally acceptable.
Surety bonds are usually conditional, whereas bankguarantees can be claimed on first demand by the borrower.
While surety bonds do not affect customers’ bank credit
limits, bank guarantees are usually part of a credit line andas such every bank guarantee entails usage of this credit line.
While surety bonds can be customised, bank guarantees areusually standardised products.

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Atradius Surety FAQ 2024

Why choose Atradius for my surety bond needs?
 Flexibility: tailor-made solutions that fit your needs andbusiness goals.
 Reliability: financial rating affirmed by A.M. Best as
A (excellent) and Moody’s as A1 with a stable outlook
making Atradius a reliable reference for your beneficiaryand partners.
 Expertise: more than 50 years of experience on thesurety market and in-depth market knowledge with local
presence in 12 European countries.
 Prudent risk management: long-term partnership ismore important to us than short-term growth. We are notjust a facility provider, but a surety underwriter, aiming
at helping you secure your performance and boost yourbusiness development.
 Fast and efficient support: quickly and easily handlingyour surety needs. Assist you with technical and financial
advice that might prevent default on your obligations.
What are the main sectors where surety bonds arerequested?
At Atradius Surety we work with different industries andmaintain relationships with a wide range of companies.
Some of the main sectors we are active in are: construction,logistics, manufacturing, real estate, energy and wastemanagement.

Can Atradius issue financial guarantees?
No, we are not allowed to issue financial guarantees. In fact,
as financial guarantees are issued to cover purely financial
obligations granted by banks or financial institutions, theseproducts fall outside the scope of insurance.
What is the appetite for Atradius surety bonds on the market?
Our surety bonds are widely accepted by governments as wellas large publicly traded companies and private enterprises.
Where can I request an Atradius surety bond?
Atradius Surety is active and can issue surety bonds locally in
12 European countries: Belgium, Denmark, France, Finland,Germany, Italy, the Netherlands, Norway, Luxembourg,
Portugal, Spain and Sweden. Surety requests related to othercountries are evaluated on a case-by-case basis.
Our Surety teams assess these requests according to relevant
local legislation on insurance licensing as well as otherfactors, such as the nature of the underlying obligations,terms and conditions, etc.
Can Atradius issue individual (one-off) surety bonds?
Individual (one-off) surety bonds can be offeredexceptionally and only in some of the countries where
Atradius offers Surety. In most of the cases, first a guarantee
facility agreement has to be established in the form of acontract between Atradius and you, our customer. Afterwards
you can apply for the issuance of individual surety bonds
under the scope of this facility.

What information is required to assess a surety bond facility?
The information required to assess a surety bond facility is,among others: Financial statements (at least the last three financialyears).
 Stakeholders’ and management team information.
 Business strategy (plan) for the next few years.
 Overall surety bond need (e.g. type of bonds, beneficiary
countries, durations).
Depending on the complexity, this process can take up to acouple of weeks.
What is the procedure I need to follow for a surety bondapplication process?
 Apply for a surety bond through our online application
process or an email (depending on the bond needed).
 Fill in the application form including the requiredbond type and wording, amount, duration and further
specifications about the obligations to cover.
 Your application is assessed by your local surety team.
 You receive a draft of the surety bond to be issued and if
approved by you.
 The surety bond is issued in favour of the beneficiary.

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Atradius Surety FAQ 2024

How is my surety bonds application assessed?
When assessing your application, we look at: Your underlying obligation that originates the surety
need (e.g. contract, regulations).
 Surety bond amount, duration and beneficiary.
 Your capability of fulfilling your obligations towards thebeneficiary.
 Specific requirements for the surety bond wording if any
After the evaluation has been done, we will send you anoffer, which sets out all terms and conditions required inconnection with the underlying risk.
How quickly can a surety bond be issued?
In case of a new relationship, Atradius Surety needs to perform a full underwriting assessment, which depending on
the complexity, may take up to a few weeks to be completed
and a surety bonds facility to be established. Once the facility
is established, in most cases we can issue a surety bondwithin 24 hours, depending on the amount, complexity andnature of the case.
Is collateral required?
A collateral is an asset or more general commitment that has
been offered as a counter guarantee for a policy or a surety
bond. Collateral might be needed in some countries andcases. Collateral is usually requested in order to strengthen
the credit worthiness of a prospect/customer and enable a
positive final evaluation of a surety bond request.

How much does a surety bond cost?
We evaluate each case individually as the premium
varies according to the type and duration of the bond, thecustomer’s financial information and the market practice.
What is the duration of a surety bond?
Duration varies depending on the type of a surety bond.
When can a surety bond be terminated?
A surety bond is terminated when it reaches its specificexpiration date or when the beneficiary provides a “releaseletter”. This is a declaration that the underlying obligations
have been fulfilled and no longer need to be guaranteed.
Can a surety bond be cancelled?
No, we cannot cancel a surety bond. However, specificconditions may apply.
What happens if a claim is filed against my surety bond?
First, the customer is informed that a claim has been filed togive him the opportunity to reach out to the beneficiary toresolve the case. If this is unsuccessful, we assess the claim
for its validity and, if approved, we pay the amount due to thebeneficiary in accordance with the value determined within
the bond. If we consider the request baseless or partiallygrounded (such as the unfair calling of a bond), we can takelegal action to protect both your business and ourselves.

Follow Atradius

atradiusgroup

atradius

Atradius
David Ricardostraat 1- 1066 JS Amsterdam
P.O. box 8982 1006 JD Amsterdam
The Netherlands
Contact us
Atradius.com

https://group.atradius.com/surety