Liga Asuransi – For many contractors or suppliers, winning a project tender is a golden opportunity to advance. But before signing a contract, there’s one crucial requirement that can’t be ignored: a tender bank guarantee. This document serves as proof of the tenderer’s seriousness and as a guarantee to the tender organizer that you’re ready to execute the project as committed.
Unfortunately, many businesses fail at this stage due to fatal errors in the bank guarantee process. As a result, not only are tender opportunities lost, but the company’s reputation is also tarnished.
Through this article, we will discuss the 5 most common and high-risk mistakes in managing tender bank guarantee, complete with ways to avoid them so you can be more prepared and confident when taking on big projects.
However, before we discuss this further, it’s important to know that managing a bank guarantee doesn’t have to be complicated or time-consuming. With the help of L&G Insurance Broker, the process can be much faster, safer, and more efficient. As an insurance brokerage firm with over 30 years of experience, L&G has an extensive network of trusted underwriters and banks in Indonesia.
So, if you need bank guarantee services for government tenders or private projects, don’t hesitate to consult with our team of experts for free.
👉Contact WhatsApp 08118507773 or email to halo@lngrisk.co.id and make sure the project doesn’t fail just because of document matters!
Mistake #1 – Choosing the Wrong Type of Bank Guarantee
The most common mistake often made by contractors or tender participants is not understanding the types of bank guarantees.iMany people think all bank guarantees are the same, but each type has a different function and application period.
In general, there are four main types of bank guarantees:
- Bid Bond (Tender Guarantee)— used during the auction or tender process. Its purpose is to ensure that tender participants will not withdraw after being declared the winner.
- Performance Bond— issued after the contract is signed, as a guarantee that the contractor will complete the project as agreed.
- Advance Payment Bond— guarantee that the advance payment received by the contractor from the employer will be used according to the project provisions.
- Maintenance Bond— applies after the project is completed, ensuring the contractor remains responsible if damage is found during the maintenance period.
Many tender participants choose the wrong type of guarantee because they don’t understand the differences in their functions. For example, using performance bond even though what is requested is bid bond As a result, the documents were rejected, and the tender opportunity was automatically forfeited.
To avoid this, be sure to carefully read the tender documents and understand the types of collateral required. If in doubt, consult with a professional like L&G Insurance Broker, who has experience handling various government and private projects. With the guidance of a team of experts, you can ensure your submitted documents are on target and comply with tender requirements.
Mistake #2 – Processing a Bank Guarantee Too Late
Another common fatal mistake is processing the bank guarantee when the tender deadline is approaching. Many contractors only realize the importance of this document when the deadline is near. As a result, they rush, panic, and often fail to participate in the tender because the document isn’t issued on time.
It’s important to note that the bank guarantee issuance process isn’t instantaneous. It involves analysis, document verification, and approval from the guarantor (bank or insurance company). If all the documents are complete and the company profile is good, the process can be quick, but if there’s missing data or additional clarification needed, it can take days.
Imagine you’ve carefully prepared a tender proposal, only to have it rejected simply because the guarantee documents haven’t been submitted. What a shame, right?
This is where working with a professional broker like L&G Insurance Broker is crucial. The L&G team understands project dynamics and tender deadlines, so they can help you prepare all the documents from the start. Even if it’s your first time submitting a bank guarantee for a tender, L&G can provide step-by-step guidance to ensure a smooth process.
So, don’t wait until the deadline approaches. Submit a bank guarantee early in the tender period and hand over the technical aspects to the experts. That way, you can focus on creating the best offer, rather than rushing to meet deadlines.
Mistake #3 – Not Completing Supporting Documents
One of the most common reasons for failed tender bank guarantee applications is incomplete supporting documentation. Many business owners take this lightly, even though guarantors, both banks and insurance companies, strictly adhere to the verification process.
Usually, to apply for a bank guarantee, you will be asked to complete the following documents:
- Latest company deed and business permit
- NPWP and latest financial report
- Appointment letter or tender document from the employer
- Company bank statement
- Work contract (if you have won the tender)
- Project data and the value of the proposed guarantee
Common errors include outdated documents (e.g., expired business permits), unaudited financial reports, or incomplete project data. As a result, the analysis process is hampered or even rejected.
If this happens, your time and energy will be wasted. However, with a little care and advance preparation, problems like this could have been avoided.
The solution? Use the services of L&G Insurance Broker. The L&G team will help you prepare all supporting documents neatly and according to insurance standards. They can also check the completeness of your files before submission, so you don’t have to worry about missing anything.
With complete and well-organized documents, the opportunity to submit tender bank guarantee you get approved so much bigger fast, safe, and without drama!
Mistake #4 – Not Understanding the Terms and Conditions of a Bank Guarantee
Another mistake that often causes major problems is failing to properly read and understand the terms and conditions of the bank guarantee document. Many contractors or tender participants focus solely on the guarantee amount without paying attention to the content and details of the clauses.
However, each bank guarantee has a different validity period, collateral value, and disbursement conditions. For example, some bank guarantees automatically expire after the tender period ends, while others can be automatically extended (auto renewal). If you don’t understand this, the document may be deemed not to comply with the tender committee’s provisions.
Furthermore, some tender participants were unaware that bank guarantees could be disbursed if they were deemed in default, even though the matter was still being clarified. As a result, many were shocked to learn that their guarantees had been disbursed without a chance to provide a defense.
To avoid this mistake, make sure you:
- Read the entire contents of the bank guarantee carefully before submitting it.
- Ensuring the validity period and value of the guarantee are in accordance with the tender provisions
- Consult with a professional before signing or submitting any documents.
L&G Insurance Broker’s services can help you understand all these details in simple language. The L&G team will ensure that your submitted bank guarantee documents comply with tender requirements and are safe from misinterpretation. This way, you can focus on your winning tender strategy, rather than worrying about administrative errors.
Mistake #5 – Not Using Professional Broker Services
The final, and perhaps most overlooked, mistake is not using a professional broker when processing a bank guarantee. Many contractors think, “Oh, I’ll just handle it myself, it’ll save money.” However, without the right experience and connections, the process can be much more complicated, time-consuming, and even risk rejection.
Managing a tender bank guarantee isn’t simply about submitting documents and waiting for approval. It involves numerous steps, including analyzing the company profile, negotiating the collateral value, and intensive communication with the guarantor. If you don’t know the right path, you could end up trapped in a lengthy process that wastes time and energy as the tender deadline approaches.
This is where the role of a professional broker like L&G Insurance Broker becomes crucial. As a company with over 30 years of experience in the insurance and guarantee industry, L&G has an extensive network of banks and official guarantee companies supervised by the Financial Services Authority (OJK).
With L&G’s help, you won’t have to worry about starting from scratch. Their team will help you prepare documents, ensure compliance with tender requirements, and expedite the bank guarantee issuance process without compromising legality. As a result, you’ll receive valid documents on time, ready to use immediately for your project.
So, instead of wasting time and energy trying it yourself, leave it to the experts. With the support of bank guarantee services from L&G Insurance Broker, your chances of winning the tender are much higher, and the process is stress-free!
Conclusion
Managing a tender bank guarantee may seem simple, but it’s actually fraught with details that shouldn’t be overlooked. The five mistakes we discussed earlier, from choosing the wrong type of collateral, delaying document processing, incomplete files, not understanding the terms, to not using a professional broker, can all be fatal and lead to your failure to participate in the tender.
However, all of these mistakes can be avoided with a little planning and choosing the right partner. This is where L&G Insurance Broker comes in. With extensive experience and a strong reputation in the insurance and project guarantee industry, L&G is the best solution for contractors, suppliers, and businesses looking for hassle-free bank guarantee management.
Through an official network of OJK-supervised guarantor companies, the L&G team can process documents quickly, securely, and legally. You simply need to prepare the documents, and L&G will take care of the rest.
So, don’t let a small mistake ruin a big opportunity. Ensure every step of your tender process runs smoothly with the help of a trusted bank guarantee service from L&G Insurance Broker.
👉 Come on, get a free consultation now via WhatsApp 08118507773 or email to halo@lngrisk.co.id.
With L&G, you not only get a bank guarantee but also peace of mind and complete trust from the project provider.
