Bonding comes in two forms: Surety and Fidelity. Our bond department provides clients with the bond requirements they need to bid public work and protect their businesses against employee dishonesty.
Basic Information about Surety Bonds
A surety (it’s pronounced like it has an “h” in it – Shurety) bond is a written guarantee that someone will perform according to a contract. While it is often underwritten by an insurance company, it is NOT insurance, it is a credit arrangement. In laymen’s terms, it is similar to being a co-signor for a loan at the bank for a son or daughter on their first car loan. While you might be willing to co-sign for the loan, you do not expect or want to make those car payments – that is their responsibility!
The key aspects of a surety bond include:
1. The bond guarantees what is in the agreement or contract. That underlying document can be a construction permit from a town, a contract agreement to construct a building, a will or court order, etc.
2. There is a qualification process to obtain the bond and that generally means a credit check on the entity applying for the bond and a review of the agreement.
3. The more complex the underlying agreement, the more important it is to provide a complete application to show that you can perform your obligation. A permit bond is much easier to obtain than a bond to construct a $2,000,000 building project.
4. A professional surety agent will be invaluable to assisting you through the bonding process.
Some of the more typical types of bonds are:
Contract Bonds – Bid, Performance and Payment, Maintenance Bonds
License & Permit Bonds – One of the more easily obtainable bonds.
Court Bonds –
Judicial bonds – needed for lawsuits by both plaintiffs and defendants
Probate bonds – needed by Executors, Administrators, Guardians, etc.
You expect one thing from your insurance: to be made whole when an accident or disaster occurs. Knowing that policies vary from carrier to carrier means that there is no such thing as an apples-to-apples quote.