Guidance

Bond Insurance Policy

Find out about our Bond Insurance Policy: its benefits, eligibility criteria and how to apply.

As a condition of some export contracts, a UK bank may be required to issue a bond on behalf of a UK exporter to an overseas buyer. The bank may also issue a counter-guarantee to a bank in the buyer’s country.

Our Bond Insurance Policy protects UK exporters against demands for payment under a bond or a counter-guarantee that is either unfair or caused by political events.

Benefits

Exporters taking out a bond insurance policy receive:

  • up to 100% cover
  • protection against losses suffered because of unfair calls on the bond or counter-guarantee
  • protection against losses suffered because of fair calls caused by certain political events

Eligibility criteria

The transaction must satisfy UKEF’s eligibility criteria, which includes, among others, the requirements that:

  • the exporter must be carrying on business in the UK
  • the buyer must be in a country outside the UK
  • the bond must not be a tender or bid bond or a bond given for contract payments that are aid-funded by the UK government

All transactions supported by UKEF must satisfy:

The transaction may not be supported if there are sanctions imposed on the country of the overseas buyer.

The main types of bonds we are asked to cover are advance payment bonds and performance bonds. We can also consider providing cover for reducing bonds, which are bonds under which the amount payable reduces over time or as goods or services are delivered.

We cannot consider cover for tender or bid bonds.

Cost

The premium payable for our cover is determined on a case by case basis.

How to apply

To find out more about our Bond Insurance Policy or to discuss eligibility for our support, contact our customer services team. Contact customer.service@ukexportfinance.gov.uk or call +44 (0)20 7271 8010.

Our proposal form and product documentation are also available if you’re ready to submit a proposal.

Proposal form and product documentation

Specimen policies to assess whether our bond insurance policy is suitable for the contract.

Submit a proposal.

More information

Published 19 April 2013
Last updated 24 April 2017 + show all updates
  1. Change to Security of Information Arrangements

  2. First published.