What is a surety bond (insurance guarantee)? How does it work?

Written by the Italiafideiussioni editorial team, a brand of BrokerSubito S.r.l.s. (RUI Section B no. B000674688)

In short. An insurance surety bond (also called a surety policy) is a guarantee by which an insurance company undertakes to pay a creditor – a public body, a landlord, the Italian Revenue Agency (Agenzia delle Entrate) – if the person who requested it fails to meet their obligations. You need one to take part in public tenders, obtain advance payment of public grants, claim a VAT refund, register in the VIES database as a non-EU operator or sign a lease without tying up cash. As a rule, it does not use up the credit lines your business has with its bank.

If you are a business owner, a professional or a private individual and you have been asked for a guarantee, this guide explains what an insurance surety bond is, how it works, when you need one, which documents to prepare and how to check that it is valid. If you already have a tender notice, a contract or a request in hand, you can ask our team for an assessment right away.

What is an insurance surety bond

A surety bond (fideiussione) is the contract by which one party, the surety, guarantees the performance of another person’s obligation by binding itself personally to the creditor (art. 1936 of the Italian Civil Code). In an insurance surety bond, the surety is an insurance company authorised to operate in the suretyship class (ramo cauzione).

In practice: you request the guarantee, the company issues it in favour of your creditor and, if you fail to honour your commitment, it pays in your place up to the guaranteed amount. After paying, the company has a right of recourse: it will ask you to repay what it has paid out. A surety bond is therefore not insurance covering a loss of yours, but a guarantee you give to a third party.

For more general questions about surety bonds, including outside the insurance field, you will find the 14 answers on surety bonds, between theory and practice (in Italian).

The three parties involved

• Principal: the party requesting the guarantee (a business, a professional or a private individual).
• Beneficiary: the creditor receiving the guarantee (contracting authority, body awarding a grant, Italian Revenue Agency, landlord).
• Surety: the insurance company issuing the policy.

How it works in 3 steps

1. Request and assessment

You tell us who the guarantee is for, the amount, the duration and the reason (tender, contract, refund). Using the applicant’s documents, the company assesses their financial strength and payment reliability.

2. Issue of the policy

If the assessment is positive, the company sets the premium and the conditions, and issues the policy with the wording required by the beneficiary (for example, the template set out in the tender notice).

3. Delivery to the beneficiary

You deliver the policy to the beneficiary in the required form (original or digitally signed). The guarantee remains valid for the period set by the contract or the tender. If you meet your obligations, it ends on expiry or when the beneficiary releases it. If you do not, the beneficiary claims payment from the company (this is known as enforcement, or escussione): the company pays up to the guaranteed amount and then seeks recourse against you.

You can apply online. There is no need to visit an office: fill in the request form or message us on WhatsApp, send us your documents by email and receive your quote. If the beneficiary accepts a digitally signed policy, you receive it electronically and can deliver or upload it directly.

Why businesses choose it: the advantages

When a public body or a client asks for a guarantee, the most common alternative to a policy is a cash deposit: a sum paid in and blocked until the commitment ends. An insurance surety bond changes the picture for a business:

• Cash stays free: you do not tie up the guaranteed amount; you only pay the premium to the company and the rest remains available for your business.
• Credit lines untouched: as a rule, it does not use up the credit facility your business has with its bank, which stays available for other needs.
• Timing that fits your deadlines: with complete documents the assessment is quick, which is decisive when there is a tender or a contract deadline to meet.
• Compliant wording: the policy follows the template required by the beneficiary, whether a contracting authority, a public body or a landlord.

When you need one: the most common cases

VIES guarantee for non-EU operators

Businesses based outside the European Union that operate in Italy through a tax representative must provide a guarantee in order to be included, or to remain, in the VIES database for intra-Community transactions. The obligation stems from DPR 633/1972, art. 35, and was implemented by the Ministry of Economy and Finance decree of 9 December 2024: the guarantee must be for at least 50,000 euros and last at least 36 months. With an insurance surety bond, the business avoids tying up the same sum in a cash deposit.

→ Learn more: VIES guarantee for non-EU operators

Public contracts

The Italian Public Contracts Code (D.Lgs. 36/2023) requires one guarantee to take part in the tender (provisional guarantee, art. 106) and another to sign the contract after the award (definitive guarantee, art. 117). Both can be provided as an insurance surety bond. Likewise, the advance on the contract price provided for by art. 125 is paid to the contractor only once a guarantee covering the advance has been provided.

→ Learn more: provisional guarantee for tenders · definitive guarantee · all guarantees for public tenders, including the advance payment guarantee

Advance payment of public grants and non-repayable funds

Many public funding schemes pay the grant in advance only against a guarantee that protects the awarding body if the grant is revoked. An insurance surety bond is the most widely used way to obtain the advance without waiting for the project to end: it covers the amount advanced, and the business receives the funds straight away to get the project started, without blocking an equivalent sum in a deposit. This applies to non-repayable grants, subsidised loans and funding schemes for start-ups and agricultural businesses.

→ Learn more: surety bonds for public grants

VAT refund

To obtain a refund of a VAT credit above the threshold set by DPR 633/1972, art. 38-bis, a business must provide a guarantee in favour of the Italian Revenue Agency (except where a visto di conformità, a compliance certification issued by a qualified professional, is sufficient). The insurance surety bond protects the tax authorities if the refund turns out not to be due.

→ Learn more: surety bond for VAT refunds (in Italian)

Tourist visa for a foreign guest

If you invite to Italy a foreign national who needs a tourist visa, you can guarantee your guest’s means of support for the length of the stay with a surety bond. It is requested by a person resident in Italy – an Italian citizen or a foreign national with a residence permit – in favour of the invited person, who submits it to the Italian Consulate or Embassy together with the visa application.

→ Learn more: guarantees for foreign citizens

Property leases

In lease agreements, especially commercial ones, an insurance surety bond protects the owner if rent is not paid, without the tenant having to pay in and block a deposit.

→ Learn more: surety bond for leases (in Italian)

Other cases

• Registrations and regulated activities: Environmental Managers Register (Albo Gestori Ambientali), certificate of financial capacity, Employment Agencies (in Italian)
• Construction and real estate: guarantees for building sites, planning charges and property sales
• Foreign citizens: guarantees for other visas and permits

→ All solutions: surety bonds for businesses and professionals

Insurance surety bond or a guarantee issued by a bank: the differences

The same guarantee can be issued by an insurance company or by a bank. The beneficiary accepts it in either form when the law or the tender allows it: always check the wording of the tender notice or the contract.

For a more detailed comparison, with criteria for deciding case by case, read insurance surety bond or a guarantee issued by a bank: which to choose and why.

What the cost depends on

The cost of an insurance surety bond is the premium paid to the company. There is no single price: it depends on

• the guaranteed amount;
• the duration of the guarantee;
• the type of obligation guaranteed (tender, grant, VAT refund, lease);
• the applicant’s financial strength and payment history;
• the conditions required by the beneficiary (for example, payment “on first demand”).

To find out the exact cost, you need a quote based on your situation.

Documents required

If you are a business

• identity document and tax code (codice fiscale) of the legal representative;
• an up-to-date company registry extract (visura camerale);
• the latest filed financial statements;
• up-to-date interim accounts;
• the document requiring the guarantee (tender notice, contract, authority’s request).

If you are an individual

• identity document and tax code (codice fiscale);
• your latest Italian tax return (Modello 730, Modello Redditi or Certificazione Unica);
• your latest payslips, if you are an employee;
• the document requiring the guarantee (for example, the lease agreement).

The company may ask for additional documents depending on the amount and type of guarantee.

How to check that a surety bond is valid

A surety bond issued by an unauthorised party may be rejected by the beneficiary and leave you without a guarantee. Before signing, check that:

• the company is authorised by IVASS, the Italian insurance supervisor, to operate in the suretyship class (list of companies on the IVASS website);
• the intermediary assisting you is listed in the Single Register of Insurance Intermediaries (RUI check);
• the policy wording matches the wording required by the beneficiary.

If the policy is issued by a company based in another country that operates in Italy under the freedom to provide services, the checks are different: you will find them in the guide on how to verify a surety bond issued by a foreign company (in Italian).

Italiafideiussioni is a brand of BrokerSubito S.r.l.s., registered in the RUI, Section B, no. B000674688: you will find all our details on the About us page. To recognise fake policies, read our guide: fake surety bonds, how to recognise them.

Frequently asked questions

Article published on 17 December 2014, last updated on 01 October 2026