Your Business Guarantee

What is a Surety Bond?

Surety Bonds  –  by issuing Letters of Guarantee an insurer guarantees that a third party will fulfill its obligations set forth in a contract, covering from construction or service delivery, to typical business agreements between trade partners. The issuance of a Surety Bond may act as a financial guarantee for nearly all types of sales and purchase agreements, service agreements or other kinds of contracts.

The Surety Bond is essentially a three-party agreement by which, one party (Guarantor) commits to a second party (Obligee) to cover any loss possibly incurred due to the inability of a third party (Principal) to abide by the terms and conditions set forth in a specific contract between the Obligee and the Principal.

The issuance of such guarantees by insurance organizations is a particularly common practice in international business. Whilst in Greece banks issue -almost exclusively- most letters of guarantee, after putting up an adequate part of their clients assets as collateral, in the rest of the world nearly 25% of such guarantees are issued by insurers, the guaranteed capital of which exceed 900 billion euro.  In countries like Italy or the UK, banks and insurers enjoy an equal share of the surety market.

Why Surety Bonds

Because surety bonds protect businesses from financial losses incurred by third parties that become insolvent and deny -or repeatedly defer- their payment obligations.

Because surety bonds ensure solvency and business continuity, and reduce the exposure to financial risks that could potentially have a severe impact on both operations and company prestige.

Who we are

Katsiberis Insurance Brokers SA (NAK) is an independent firm offering comprehensive consultancy services in the fields of insurance and risk management.

Since 1935, we have established our presence as successful insurers both locally and internationally, making our brand a synonym to offering pioneering and reliable insurance products.

Our long-standing business relationships with top-tier clients underline the quality of our services and position  NAK as one of the leading agencies of the Greek market.


ΝΑΚ has developed partnerships with leading global reinsurers and surety providers, such as INTERAMERICAN, the biggest private insurer in Greece, owned by the Dutch Group, ACHMEA, one of the largest insurance organizations worldwide. Further to that, NAK partners with leading reinsurers, such as Hannover Re and Atradius Re.

Through the expertise of NAK, Surety Bonds relaunched in the Greek market after many years of absence, exclusively through the cooperation strategy of the company with INTERAMERICAN.

Types of Surety Bonds

There are two main types of Surety Bonds:

Contract Surety Bonds
Contract Surety Bonds

Contract bonds provide a financial guarantee and ensure that the Principal will meet the contractual obligations pertaining to a specific agreement, mainly in construction and building projects.

Commercial Surety Bonds
Commercial Surety Bonds

Commercial bonds provide a guarantee to the Obligee that the Principal will fulfill the obligations or commitments described in the bonded contract.

The following six are the most common sub-types of Surety bonds:



It assures that the bid has been submitted in good faith, the contractor intends to enter into the contract at the price bid, and the contractor will provide the required performance and payment bonds (e.g. in Tenders of the Public or the Private sector).



It assures the project owner (Obligee) that the contractor (Principal) is qualified and has the capacity to perform the contract, and protects the Obligee from financial loss, should the Principal fail to observe the terms and conditions set forth in their agreement.



It assures the project owner (Obligee) that, following the implementation of the project, the contractor (Principal) is qualified to perform the relevant maintenance contract, and protects the Obligee from financial loss, should the Principal fail to observe the terms and conditions set forth therein.



It assures that certain subcontractors, material suppliers, and laborers working on the bonded project will be paid. For instance, it provides a guarantee that the obligations deriving from sourcing materials will be covered.



It assures that the advance paid to the contractor in charge of carrying a project will be returned to the project owner in case of non-completion of the project and breach of contract.



It assures the Obligee (Customs and Tax Authorities) that the Principal will fulfill their obligations, that is they will pay all legally required taxes and duties related to the import or export of goods.

Frequent Questions

Who can apply for a Surety Bond?

Any business with a Greek Tax Registration number, regardless of their legal structure.

What is the scope of this Program and what is the role of INTERAMERICAN?

The scope of the Program is to issue Letters of Guarantee backed by INTERAMERICAN.

The lack of insurers who are actively engaged in providing surety bonds in Greece, in conjunction with an extensive analysis of the parameters linked to the growing demand for insurance guarantees, the tight credit policy of the Greek banks and the Surety market dynamics, enables INTERAMERICAN to define and lead this particular market segment. The entrance of Greece’s largest insurer in the Surety Bond market will add value to the real economy and facilitate business transactions through the issuance of reliable guarantees.

Which sectors should make use of the Surety Bond Program?

Import trade (Food & Beverages, Pharmaceuticals, Electric Appliances, Automotive, Apparel & Clothing): By using the Program to obtain Surety Bonds, Greek importers will be able to restore their credit lines with international suppliers, if not fully, at least to levels that would make their operation much easier.

Construction: Most construction companies are required to present Letters of Guarantee (LoG) to be able to submit a bid, implement a project, or provide maintenance services to the private sector. Obtaining a LoG from a bank can become strenuous due to extreme requirements on the bank’s side and also due to the difficulty of finding additional collaterals.

In Surety Bonds, what is the process to assess risk? What are the main assessment criteria?

Surety insurers must follow a professional risk assessment process and apply strict criteria. Essentially, the assessment entails a thorough examination of the Principal’s business activity. Prior to issuing a bond, the Surety (insurer) must be certain that the applicant meets, among others, the following criteria:

  • The type of the Surety Bond is coherent with the type of business the applicant runs.
  • The applicant has the experience and the financial status that indicate his ability to meet future obligations and contractual requirements.
  • The applicant is capable of covering current and future obligations.
  • The applicant has an outstanding credit score and maintains a good business reputation.
  • The applicant is able to offer collateral, if requested.
  • There is good communication and information sharing between the insurer and the broker.

Open communication and timely submission of data regarding their financial status and their ongoing business activities help applicants build their trust with the Surety provider.

How are the Surety Bond premiums calculated?

Obtaining a Surety Bond is more like getting a credit line from a bank than buying an insurance product.

To estimate the premium of a Surety Bond, the Insurer uses actuarial methods to assess the applicant based on elements such as financial status, experience and know-how in implementing similar projects. Premiums pay for in-depth pre-qualification services and are linked to the probability of the Principal being able to meet his obligations.

What is the difference between a Bank Guarantee and A Surety Bond?

Performance, Maintenance and Payment Bonds are typically issued by the Insurer on a non-collateral basis, in accordance with the financial status and the experience the Principal has in similar projects. In some cases the Principal is requested to post corporate or personal assets as collateral security. Surety Bonds are more a form of credit, however, they do not reduce the Principal’s banking facility. On the other hand, to secure a Bank Guarantee a contractor must be able to post significant assets as collaterals, while the bank will reduce the contractor’s line of credit and the cash flows that correspond to future payment obligations will have to appear in the contractor’s financial statements. Moreover, the reduced line of credit may cause financing issues during the initial phases of the project.

In the qualification process, Insurers focus on the contractor’s business activity, financial  resources, experience, organizational status, existing works in progress, net revenues, management ability etc, to make sure that the contractor has the capacity to perform the bonded contract. The aim of this entire process is to mitigate the risk of a non-performing contractor. Banks, on the other hand, focus more on the quality of the collateral assets, as well as on how marketable these are, in case of partial or full forfeiture of the LoG. As soon as the bank is convinced that the contractor has the means to meet his payment obligations in case of forfeiture, then the qualification process is over.

What is Forfeiture?

If the Principal doesn’t meet the terms that have been explicitly included in the bonded contract, a forfeiture takes place. The Obligee notifies the Surety of the Principal’s non-performance  and files for the corresponding claim.

The Insurer is obliged to pay the total amount, which cannot exceed the bond value, and then will turn to the Principal for reimbursement of the claim amount.

What is the term of Security bonds?

Security bond terms can vary from 3 to 12 months, with the right to be renewed or extended.

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The Principal will be asked to return the existing bond before its expiration date and request the extension of the bond term.

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9 Dekeleias str.
Athens, 143 43

+30 210 25 17 840 (& 850)
+30 210 25 27 569

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