About Indemnity Management

Introduction

Indemnity Management offers a centralized way to manage financial safeguards such as guarantees, bonds, insurances, permits, and licenses. These instruments are essential in industries like construction and engineering to reduce contractual and project risk.

The solution supports the registration and tracking of indemnities both received from and issued to customers, suppliers, or subcontractors. Indemnities can also be issued by your own company to customers and suppliers. This dual perspective ensures full traceability of obligations and protections across contracts and projects.

Indemnities act as contractual safeguards. A customer may be asked to provide a payment guarantee or performance bond. A contractor might require insurance coverage, equipment protection, or permits from subcontractors. Indemnity Management provides structure to register, track, and validate these instruments across key workflows.

Key Features

• Central Repository
  A secure location to register and manage all indemnity instruments, with full traceability and auditability.
• Manage Common Indemnity Types
  Handle various instruments such as performance bonds, advance payment guarantees, insurance certificates, warranty bonds, and permits.
• Approval and Status Control
  Use single- or multi-step approval workflows. System statuses reflect the current state of each indemnity, including  Approved, Retained, Returned, Expired, and Archived.
• Validation Rules
  Apply automated validation rules to ensure required indemnities are present and valid at key stages such as contract award or invoice certification. Rules can warn or block transactions as needed.
• Connected Workflows
  Indemnities can be directly connected to Sales Contracts and Sub Contracts, ensuring validations align with real business milestones.
• Lifecycle Management
  Indemnities can be renewed, archived, retained, or returned as project conditions change.
• Connection Analysis
  Provides insight into where each indemnity is used, helping detect gaps and support compliance tracking.

How Indemnity Management Works

The indemnity lifecycle follows a structured sequence of activities, from registration through to validation, renewal, and release. Each step supports compliance, traceability, and project alignment.

Define Indemnity Requirements

Requirements are defined during contract setup or based on project risk assessments. These may include fixed amounts, types of coverage, or specific providers. Requirements are stored against sub contracts or sales contracts for reference and tracking.

Register and Approve Indemnities

Indemnities are registered with key information including type, provider, amount, currency, and validity period. Supporting documents can be attached. Before use, indemnities must be approved. Optional approval routing allows for single or multiple approvers, and status changes reflect the approval process.

Validate Indemnities During Business Processes

Validation rules are triggered during business processes such as contract award or valuation approval. The system checks for required indemnities and evaluates their current status. Depending on configuration, it may issue a warning or block further progress until the requirement is met.

Handle Expired and Completed Indemnities

When an indemnity reaches its validity limit or fulfills its purpose, it can be handled in several ways:

• Renew
  Submit new documents related to the renewal or extend the validity dates of the existing indemnity. In either case, the indemnity must be reapproved before it can be used again.
• Retain
  Decide to keep the indemnity—whether active or expired—for possible future use or as risk mitigation. This may apply in scenarios involving the same customer or supplier, such as another contract.
• Return
  When the indemnity is no longer needed, return all associated documents and hand them back to the provider or owner.
• Expire and Archive
  The expired status can automatically be set by a scheduled system task that checks for indemnities with overdue validity dates. Once an indemnity is marked as Expired, it can be archived. Archiving changes the status to Archived but retains the indemnity record for compliance and auditing purposes.

Analyze Indemnities and Connections

Use the Indemnity Connection Analysis page to review where each indemnity is used, such as in sales contracts or sub contracts. Filter by provider, type, or expiry to support audit activities and compliance tracking.

Example Scenario

In a construction project, several subcontractors provide performance bonds and insurance certificates. These are registered and connected to their respective contracts. Validation rules ensure all required instruments are in place before awarding contracts or processing invoices. If a required document is missing or expired, the system can block the action or alert the responsible party.

When a subcontractor completes their work, the associated indemnities can be renewed, retained for future use, archived, or returned to the provider. This structured process maintains compliance, reduces risk, and ensures full traceability throughout the project lifecycle.