The function of the Surety insurance is to provide the creditor (insured) with a guarantee in compliance with the obligations of the policyholder that allows him to recover the damages that he may suffer if at the time he fails to comply with his obligations. The particularity of this insurance is that it does not cover the reparation of a physical damage but a breach of the principal obligation.
The insurance company will determine whether or not to cover a customer. Therefore, it will analyze economically and financially the situation of the client so that he can know the extent of the risk he will have to assume. Always, before contracting, the client must deliver to the company the documentation that proves its solvency and conforms to the obligations.
The period of validity of the policy is agreed in the contract and will expire when the insured informs the insurer that the guarantees presented have already expired. The full premium is payable for the entire duration of the risk and is paid by the policyholder in the form stipulated in each supplement.