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• The risk that damage occurs after a certain period after the work
has been delivered due to a workmanship defect in cases where
the work performance shall be evaluated after the delivery such
as a construction project, engineering and production of
machines.
• The risk that the employer is damaged because of the illegal
practices of the workers named in the surety bond, such as fraud
and embezzling.
• The risk that public receivables, which may potentially occur
because of the possibility of litigation before national courts in
which the customs offices, tax offices or courts are the benefi-
ciaries, and because of the possibility of obtaining goods from
customs or a mistake in customs clearing, are covered.
• The risk that payments due to subcontractors and workers are
not realized.
• The risk that the employer of the Project does not fulfill his
obligations in accordance with the terms and conditions deter-
mined in the agreement
1
.
• The risk that the debtor does not properly fulfill his obligations
as set forth in the agreement.
The Obligations of the Parties
The obligations of the parties before the surety bond is concluded
are as follows:
• The insurant is obliged to present immediately to the insurer the
statements of account of the last year and if any, the indepen-
dent auditing report and to provide the necessary explanations
on this subject upon the request of the insurer
2
.
LAW OF OBLIGATIONS
263
1
In such case, the insurance company can have the work completed through an agreement with
a new contractor.
2
In addition, the insurance company can demand, at every stage, detailed information on the
developments and strategic changes of the debtor’s activities, and important subjects concern-
ing the credibility of the debtor. As a result of the evaluation of this information, the insurance
company may request an assurance form the debtor for providing a new surety or for
continuing an existing one in case his credibility is essentially distorted.