What can cause a Bond not to proceed?

Bail Policy

Bail Policy

In a Bail Policy, there are several causes that may cause the inadmissibility of a claim or claim, one of which is known as “Extension or Waiting”, which is discussed in Article 179 of the Law on Insurance Institutions and Bail bonds

In said article, the extinction of the Bond is recognized by the simple granting of an extension or expectation of the creditor towards the principal debtor if this is granted without the consent of the Surety Institution. In other words, when a modification is made to the contract, the Institution is not notified, and if a claim is filed by the Beneficiary, the Surety is entitled to reject it.

If the Beneficiary of the Bond Policy grants the Fiado an extension that extends the term of the fulfillment of the assumed obligation, without notifying the Bonding Agent, the Policy is automatically extinguished, freeing the Institution of any compensable liability.

In the event that the Beneficiary wishes to grant an Extension or Wait, due to the fact that the Fiado will not be able to deliver the object or the work in a timely manner (as previously established in the contract), he must notify the Afianzadora, who may decide whether or not to accept such an extension. Even if the text of the Deposit Policy guarantees the Extension, it is essential that the Beneficiary notifies the Institution of the modifications made to the main contract.

When the Beneficiary or contractor notifies the Surety that there was a breach by the Fiado, requesting that the Bond Policy be made effective, and the Institution detects that the main contract was modified or extended, without having been notified, the Surety is in its right to refuse and / or decline the payment of the Bond for having operated in its favor the clause of “Extension or Waiting”.

It is important to consider that it is not valid to grant an extension beyond the time established for the fulfillment of the contract, since the obligation has already expired.

What can cause a Bailout not to precede

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