Guarantee types
We offer different guarantee types to match your need
Tryg Garanti offers a variety of guarantee types within the construction and manufacturing segment and also in favour of public authorities, e.g. the EU Directorate.
Our bonds and guarantees are widely accepted by private as well as public beneficiaries, both domestically and abroad.
We offer among others the following types of bonds:
Bank Guarantees
Bank guarantees is a broad term covering several types of guarantees, which are all intended to minimize the risk of loss in connection with contractual obligations.
As the name indicates, bank guarantees are issued by banks, but insurance companies such as Tryg Garanti and Moderna Garanti issue similar bonds.
Performance guarantees
A performance guarantee is provided by a contractor in favour of the owner or by a subcontractor in favour of the turnkey contractor. Performance guarantees are often issued according to an industry standard agreed between the parties in the construction sector. The wording may therefore differ depending on which country you want the bond to be issued.
A Performance bond protects the owner from losses, if the contractor fails to fulfil his contractual obligations. The owner will be paid the amount covered under the bond and can use it to have the work completed.
If the work has been completed and defects are found during the maintenance period, the owner can call the bond. The amount covered under the bond can be used to remedy the defects
Payment bonds
A payment guarantee protects the supplier from losses in connection with deliveries of goods and services. A payment guarantee secures that the buyer fulfils his payment obligations and pays the agreed amount to the supplier. Payment guarantees are used in many connections, for example:
- In connection with construction projects, where a payment bonds secures that the contractor pays his suppliers according to the contract. If you are a subcontractor or subsupplier to a general contractor, a payment bond can secure theat you will get the agreed payment for your work or your delivered goods.
- In connection with payment of custom taxes and excises, where the payment bond will act as security for a credit given by the customs authorities. Such payment bonds are also named custom bonds or custom guarantees.
- In connection with rent deposits, where the payment bond will replaces payment of a deposit.
Advance Payment bonds
Advance payment bonds secures refund of advance payments, should the supplier not fulfil his obligations according to the contract, be it delivery of goods or services.
Advance payment bonds are primarily seen in connection with supplies from industrial companies, where a buyer wants to secure refund of advance payments. In case of non-fulfilment of the contract, the bond can be called and the amount paid out.
Advance payment bonds are also seen in connection with construction projects, where supplies of materials are part of the project. As owner/buyer, the advance payment bond secures refund of any advance payment, should the contractor/supplier not fulfil his contractual obligations. The amount of an advance payment bond normally corresponds to the pre-paid amount. The bond normally expires, when the contractual service has been delivered.
Supply bonds
Supply bonds are especially used in the order-producing industry. A supply bond covers the loss experienced, if the supplier does not fulfil his contractual obligations due to bankruptcy or inadequate delivery. The bond covers completion and/or remedy of defects. The bond amount normally constitutes 10-20% of the contract sum and typically expires one year after contractual delivery.
Pre-qualification
A pre-qualifiction document confirms that we co-operate with you and that you presently has a guarantee facility, which cover the need for bonds on the date that you ask for the pre-qualification declaration.
Bid bonds
If you want to bid for a project during a tender proces, you may be asked to provide a guarantee in favour of the owner on the day you place your offer. This is called a bid bond or a written undertaking.
The bid bond secures that you can fulfil your obligations as bidder. Thus, you guarantee that you can perform the work according to your bid and that you can provide the required bonds if you win the contract.
When the contract is signed, the bid bond is often replaced by a performance or supply bond.
EU bonds
EU bonds are issued in favour of the authorities for example in connection with imports and exports of dairy products. They may also be issued in connection with payment for products bought from the EU intervention stock. Or as security for refund of EU subsidises according to EU’s market schemes.
An EU bond secures that the company fulfils its obligations according the the EU market schemes.
Tax bonds
Tax bonds are payment bonds which secures payment of taxes and excises when trading with countries outside of the EU. They are for example used in connection with imports and exports of taxed goods like liquor and tobacco.
The tax bond is issued in favour of the tax authorities.
Rent deposit bonds
Rent deposit bonds secures an owner payment of rent for a specific period, agreed upon in the underlying rental contract. The bond can be called if the tenant cannot pay his rent, for example due to bankruptcy.
If you want to know more about guarantees or if you have questions regarding the specific use of each bond type, please call us at or write to us via this form. We will return to you as soon as possible.