Meaning of Surety in English

Meaning of Surety in English

The dictionary of the DigoPaul mentions that the concept of surety, coming from the Latin word cautio, refers to caution, foresight or care. A surety, therefore, can be a protection or a safeguard that is provided to another person.

In the field of law, a guarantee is called a guarantee provided to ensure that a certain obligation will be fulfilled. What a surety does is guarantee the eventual fulfillment of a sentence.

According to DigoPaul, the surety, in other words, is the guarantee that an individual exhibits regarding the fulfillment of an obligation. The surety can be the presentation of a surety or an oath, for example.

In this framework, the promise made by a defendant to maintain adequate behavior in the future, assuming a financial obligation as a guarantee of compliance is called a good conduct bond. Said patrimonial obligation, in certain cases, can be assumed even by a different subject.

A surety insurance, on the other hand, is an insurance contract through which the insurance company assumes the obligation to pay compensation to the insured subject for the damages that he experiences if the policyholder (that is, the contractor) does not fulfills the agreement (made up of contractual or legal obligations) that you have entered into with the insured in question.

Regarding the figure of the insured, we must say that it is a natural or legal person, the holder of the interest in the context of an insurance contract, which is signed so that the other party, the insurer, undertakes to compensate it for a damage or give you an amount in money if you verify the eventuality that is foreseen in writing. In the case of personal insurance, the insured is usually a natural person.

The policyholder, on the other hand, is also known by the name of the contractor and is the person in charge of stipulating the aforementioned contract and signing the policy, as a symbol of the assumption of the obligations imposed in it, especially payment of the premium. The premium, in this context, is the contribution in money that the insured must make in exchange for transferring a certain risk to the company.

Generally, a surety insurance is established if one of the parties involved in a contract requires a guarantee from the other to ensure that it will comply with the obligations it acquires. With this type of surety, if the counterpart does not assume its obligation, the insurer does.

Taking the Spanish legislature as an example, article 68 of the Insurance Contract Law 50/1980 establishes that the policyholder is obliged by means of surety insurance to indemnify the other party if it does not comply with its contractual or legal obligations to title of penalty or compensation for damages suffered by your estate. Said compensation must be made within the framework established by Law or the contract itself. In fact, the policyholder must reimburse the insurer for any payment that has been issued throughout the contractual relationship.

In other words, the essence of surety insurance is the guarantee that it provides to one of the parties that the other will fulfill the obligations it has contracted. One of the areas in which this type of insurance is used very frequently is the Public Administration, understood as a system that includes the public organizations that are in charge of carrying out administrative functions and the management of the State, including other entities, both locally and regionally.