Foreign buyers often ask for a guarantee - assurance that you’ll perform to the stipulations of your contract. Performance Security Insurance (PSI) can cover up to 95 per cent of losses if your foreign customer demands payment on a bank-issued guarantee without a valid reason.
- Protect yourself from the expense of a wrongfully called performance guarantee.
- Free up your cash knowing you won’t have to pay to reimburse your bank if your bond is called without reason.
Bonds: a fact of international business
If a guarantee that your bank issued on your behalf is called for no valid reason, you will have to come up with funds to reimburse the financial institution. Depending on the type of guarantee, our PSI insurance could help protect you from having to reimburse this amount.
In evaluating applications, we consider a number of criteria, including:
- acceptable contract terms;
- acceptable guarantee instruments;
- your foreign customer’s profile and both current and future economic conditions in their country;
- acceptable Canadian exports of goods and services; and
- benefits to Canada derived from your export activity.
Pricing is based on a number of factors including policy liability, length of policy and, customer and country morality risks.