Financial Guarantees and Bond Insurance
A smart alternative to bank guarantees that frees up your credit limits and meets legal or contractual requirements without needing to tie up your own cash.
Freedom for your business and security for your partners
For large contracts or specific types of business, the state or business partners often require guarantees — whether it's an assurance that you'll complete a construction project, or that as a carrier, you have sufficient capital. Instead of going to the bank and having your operating credit blocked by a bank guarantee, you can use bond insurance. The insurance company will guarantee you through an insurance contract. This allows you to maintain free cash flow for investments while also meeting the strict conditions of tenders or legislation (e.g., customs procedures or operating road transport).
Why choose insurance over a bank?
Does not impact credit exposure
The biggest advantage of guarantee insurance (bonds) is that it does not affect your bank limits. If you are drawing on operating or investment loans, a bank guarantee would reduce a portion of that available credit. Insurance operates outside the banking sector, so your credit lines remain fully available for business development.
Improved Cash Flow and Liquidity
In many cases (e.g., for a carrier's financial solvency or retention money), you would have to deposit cash into an escrow account. Insurance eliminates this need. You only pay a fraction of the amount as a premium, and you can circulate the cash within your company where it generates the most profit.
Key to Public Tenders
In tender procedures, submitting a guarantee (Bid bond) is often your entry ticket. Thanks to quick insurance arrangements with Eurovalley, you can respond flexibly to new tenders without lengthy negotiations with the bank for each individual guarantee.
Real-life situations that insurance can solve
Carrier and Concession Renewal
A truck transport company owner must demonstrate financial solvency each year (approx. EUR 9,000 for the first vehicle, EUR 5,000 for subsequent ones). Instead of keeping this money 'dead' in an account, they arrange insurance for a few thousand annually and use the funds to purchase fuel.
Construction Company and Retention Release
A company completed a hall for 50 million, but the investor wants to retain 5 million for 5 years as a guarantee. The company presents an insurance "Retention bond", the investor releases the funds, and the company can use them to purchase materials for the next project.
Participation in a Large Tender
A company applies for a state contract tender, where depositing a security (Bid bond) is a condition. The insurance company issues a guarantee document, which the company attaches to its bid. If the tender is not won, the guarantee expires without further costs.
Customs Procedures Without Delay
An importer of goods from third countries needs to secure customs debt so that customs officials release the goods quickly. Customs debt insurance serves as a guarantee to the state that duties will be paid, ensuring goods do not wait at the borders.
How Eurovalley can help you
Underinsurance of Commercial Properties: A Silent Threat to Budgets and Business Continuity
Up to 70% of insured properties in the Czech Republic are currently underinsured – and this doesn't just apply to households. The problem is increasingly common with commercial buildings too. Offices, operations, warehouses, halls – their value is growing significantly, but insurance policies often remain unchanged.
Let's talk about financial guarantees
For large contracts or specific types of business, the state or business partners often require guarantees — whether it's an assurance that you'll complete a construction project, or that as a carrier, you have sufficient capital. Instead of going to the bank and having your operating credit blocked by a bank guarantee, you can use bond insurance. The insurance company will guarantee you through an insurance contract. This allows you to maintain free cash flow for investments while also meeting the strict conditions of tenders or legislation (e.g., customs procedures or operating road transport).
