Bank guarantee – this is one of the types of insurance risks in the enforcement of transactions. The essence of such insurance is that all risks in a transaction between economic entities are acquired by a Bank, insurance company or other legal entity (guarantor) at the request of the transaction participant (principal). The guarantee is issued in writing. In case of default by the principal of its obligations to the creditor, the grant undertakes to cover the losses of the latter either in full or to the extent specified in the guarantee.
Currently, in the Russian business, this type of insurance transactions is not as common as in the economies of Europe and the United States, however, the trend for its spread in the last few years is positive. Continue reading