The bonds are used as a guarantee instrument whose use is necessary for some types of procedures, processes and works. By means of a Bond, the fulfillment of the obligations established in a contract is ensured and in the event that a breach occurs, the Surety Institution is in charge of compensating the damage.
There are different types of bonds in our country, which, in turn, depend on the type of obligation or contract whose fulfillment is being sought. This type of guarantees, provide physical and moral persons, the certainty that what is established in a contract is going to be carried out although there is a risk that the Fiado does not comply in a certain way.
The types of bonds, are divided into 5 large branches:
- Branch I ( Fidelity Bonds ): They are responsible for protecting the assets of companies, ensuring compensation for damage that may cause an employee of the organization to commit a property crime against the assets of the beneficiary or which is legally responsable. This type of bond covers: Theft, fraud and abuse of trust.
- Branch II ( Judicial Bonds ): Its function is to guarantee compliance with obligations and responsibilities that result from a judicial process, whether criminal or non-criminal. In the case of penalties, the freedom of the people who are subject to a criminal process is guaranteed, in order to avoid that the defendant placed on parole, evades the action of justice. On the other hand, non-criminal, ensure compliance with the obligations resulting from any civil controversy where there have been damages to the nation or in issues of protection and labor trial.
- Ramo III ( Administrative Bonds ): Its objective is to guarantee compliance with the obligations derived from a contract, purchase order or lease, which may be: Contest, Advance, Good Quality and Hidden Defects.
- Branch IV ( Credit Bonds ): Used to guarantee the payment of credit obligations authorized by law.
- Branch V ( Escrow of Trust ): Process by means of which, a person called “trustor”, transfers some good to another person, called “fiduciary”.
The Guarantee, plays a very important role in the day to day of people and companies, because they help to ensure that the obligations and processes are carried out in a timely manner, as previously established in the contract.
Are you interested in taking out a Security Deposit or would you like to know more about the different types of Security used in our country? Get in touch with us, we will gladly support you!