Demand guarantee (bank guarantee)
A demand guarantee is a bank's promise to pay the other side of a contract on a demand that meets its terms. The beneficiary gets cover from a bank. The applicant carries the risk of a demand it disputes.
Three risks decide whether an export gets paid, and Berne Union members paid over $11 billion in claims in 2025
Buyer risk is the chance an importer pays late or not at all. Country risk is the chance events in the buyer's country stop a payment. Performance risk is the chance one side does not deliver. Each has its own measure and its own cover.