mercer county bail bonds

Insurance, what is the security policy and how does it work

Among the various insurance policies available to the consumer there is the guarantee policy, or surety policy. This guarantees the payment in favor of a third party (the beneficiary) of a specific sum of money, in the event of default of a principal obligation by the insured.

But let’s see, in detail, what it is.

What is the security policy?

The security policy is a contract that governs the relationship between three parties:

the contracting party: a person who is required to provide a guarantee, but unable to provide the entire economic coverage

the beneficiary: person who benefits from the insurance surety policy as a guarantee of the fulfillment of the commitment signed by the contractor mercer county bail bonds.

the guarantor: or the insurance agency or the bank that issues the sureties.

With the security policy, the insurance company, or possibly the bank, takes charge of the commitment made by the contractor, guaranteeing for him the fulfillment of the agreements agreed with the Beneficiary.

For example, if you have applied for a mortgage , with this policy you can guarantee the bank the monthly payment of the installment, even in the event of a lack of liquidity. The insurance will cover the amount due, paying the amount necessary to pay the installment directly to the bank.

If, on the other hand, you are a building contractor and you realize that the money at your disposal will not be sufficient to complete the construction of a building, with the security policy you will have the guarantee that the insurance will cover all the expenses necessary to complete the work.

Furthermore, the surety policy is often required by law to deal with various eventualities, including:

participate in tenders;

obtain concessions or licenses;

be able to start an economic activity;

to repay debts to the state.

Once the preliminary checks have been carried out, if the contracting party is solvent, the insurance company or the bank proceed with the issue of the security policy.

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