Legal Nature of Surety Insurance: Supreme Court’s Perspective
Legal Nature of Surety Insurance: Supreme Court’s Perspective Surety insurance plays a crucial role in ensuring contract fulfillment in various industries. Particularly in the construction sector and large-scale contracts, it acts as a key legal mechanism to maintain trust between parties. However, surety insurance differs from general indemnity insurance and exhibits characteristics similar to a surety contract. Existing Supreme Court Precedents on Surety Insurance Surety insurance is fundamentally a type of indemnity insurance, but it closely resembles a surety contract in essence. The Supreme Court has consistently interpreted surety insurance as follows: - Surety insurance covers the loss incurred by the insured (creditor) due to the non-performance of the policyholder (debtor). - Although formally structured as an insurance contract, it effectively functions as a surety. - The 2014 amendment to the Commercial Act (Articles 726-...