The dictionary of the Royal Spanish Academy (RAE ) mentions that the concept of caution , from the Latin word captive, refers to the caution , the forecast or the watch out . A caution, therefore, can be a protection or a guard that is given to another person.
In the field of right , it is called surety to guarantee provided to make sure that a certain obligation will be fulfilled . What makes a surety is to guarantee the eventual fulfillment of a sentence.
The bond, in other words, is the warranty that an individual exhibits regarding the fulfillment of an obligation. The bond can be the presentation of a guarantor or a oath , for example.
In this framework, it is called surety bond to promise carried out by a process of maintaining adequate behavior in the future, assuming a patrimonial obligation as a guarantee of compliance. This patrimonial obligation, in certain cases, can be assumed even by a different subject.
A surety insurance , on the other hand, it is a contract of safe through which the insurance company assumes the obligation to pay compensation to the insured subject for the damages it experiences if the policyholder (that is, the contracting party) does not comply with the agreement (composed of contractual or legal obligations) that he has assumed with the insured in question.
With respect to the figure of insured , we must say that it is a person physical or legal, 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 to deliver an amount in money if it verifies the expected eventuality written. In the case of personal insurance, the insured is usually a natural person.
He insurance policy holder On the other hand, it is also known as contractor and it is the person in charge of stipulating the aforementioned contract and signing the policy , as a symbol of the assumption of the obligations imposed on it, especially the 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 he demands from the other a guarantee to ensure that he will fulfill the obligations he acquires. With this type of bond, 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 obligated by means of the surety insurance to indemnify the other party if he does not fulfill his contractual or legal obligations to penalty or compensation title damage who has suffered his patrimony. Said compensation must be made within the framework established by the 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 the surety insurance is the guarantee that it provides to one of the parties that the other will fulfill the obligations that 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 public organizations that are responsible for carrying out administrative functions and state management, among other entities, both locally and regionally.