Surety Bonds

This product range protects government agencies and contracted companies to ensure that contracts are completed according to mutually agreed terms. Although a bond will not provide complete indemnity to the project owner, it acts as a deterrent helping to ensure that contractors comply with the terms of a contract. 

 

ATI’s role is to issue bonds to project sponsors or the contracted firm, and to reinsure the bank or the insurance company issuing the bond. We also add value to transactions by doing our own credit analysis on the contracted firm.  This new line of business has so far not been introduced in all our member states. We will assess the needs and the potential of each market and decide case by case on the products we will issue or reinsure.

 

What types of bonds does ATI currently offer?

Advance payment bonds. This is a guarantee that the buyer or project sponsor/owner will be able to recover the down payment made to the exporter or contracting firm should they fail to complete the contract or only partially complete it

 

Bid bonds. This guarantee assures the contractor or buyer that the project sponsor/owner or exporter will not withdraw a contract offer or refuse to sign the contract once it has been awarded

 

Customs and warehousing bonds. This guarantee protects any party who has allowed an importer or a logistics agent to obtain delivery of goods, or store goods in a warehouse

 

Performance bonds. This acts as a guarantee for the buyer or project sponsor/owner that the contract will be performed within the agreed time frame and according to the terms of the contract

 

Retention & Maintenance bond. This is a guarantee to secure payment to the contractor or buyer by the beneficiary before the date for payment or release contained in the contract

 

Facultative reinsurance of bonds

ATI also offers facultative reinsurance of bonds issued by banks and general insurance companies.

 

What countries is ATI covering?

Bonds are a relatively new product for ATI so it has decided to cover only a limited market in Kenya, Tanzania and Uganda. This policy will be reassessed as demand dictates. 

 

What are the general exclusions not included in this cover?

The following risks are excluded from ATI’s policy:

a cataclysmic event

riots and civil commotion 

partial occupation of a territory by a foreign power

credit risk insurance

consumer risk

pure political risk

long term bonds that are more than 7 years, unless approved by the ATI management

 

Meiqi Gao
Business agent/representative in China for The African Trade Insurance Agency
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Tel.: + 86 10 52 87 1286
Email: [email protected]
http://www.ati-aca.org