In 2025, funds raised through the National Recovery Plan (NRP), provided by the European Commission to support its member states, will have a significant impact on the economic activity. It is expected that these funds will contribute to a nearly 50% increase in total investment expenditures and will play a crucial role in public spending. According to the forecasts from the economists at PKO BP, the construction sector will be the biggest beneficiary of these funds.
Poland will receive a total of €59.8 billion (PLN 257.1 billion) under the NPR, of which €25.27 billion (PLN 108.6 billion) are grants and €34.54 billion (PLN 148.5 billion) are preferential loans.
As activity in the construction sector increases, companies implementing large infrastructure projects will require appropriate forms of insurance protection. One of the most commonly used solutions is the Surety Bond.
Surety Bonds are widely used in construction, especially for large infrastructure projects. They provide investors with certainty that the contractors will meet their obligations, and in the event of problems with the project or delays, allow them to file a claim and recover funds up to the amount secured by the bond.
A Surety Bond serves as an alternative to traditional deposits or bank guarantees required to secure contracts. A company does not need to block its financial resources, which grants it greater financial flexibility and frees up credit capacity.
The following types of Surety Bonds are available:
- Bid Bond – serves as an alternative to traditional bid deposits in tender procedures.
- Performance Bond – provides full contract security, covering both timely and proper execution of the agreement.
- Maintenance Bond – secures against defective workmanship or material after the work is completed and the handover protocol is signed, often for a period of up to 5 years or sometimes longer.
- Advance Payment Bond – secures an advance payment for the implementation of the services.
To apply for an Surety Bond, a company must meet specific conditions:
- It must have at least two years of business activity history and prove that it possesses adequate financial or asset resources corresponding to the amount it is applying for.
- It must have no overdue payments and be recognized as a reliable entrepreneur.
- It must have references for completing similar projects of comparable value.
Companies with substantial financial or asset resources can also apply for a Surety Limit, which specifies the maximum amount that the insurance company can secure for multiple projects.
Feel free to contact us,
Pomerania Brokers
Our experience in numbers:
- The duration of the longest single Surety Bond obtained – 123 months.
- The highest Surety Limit for a single Surety Bond obtained – PLN 43 million.
- The total number of Surety Bonds obtained for our clients in the past 5 years – over 600.
