Surety Bonds

What is a Surety Bond?

A surety bond is a financial contract involving three parties. The bond, supplied by the surety or bond company, guarantees the principal’s obligations are fulfilled to the obligee.

Principal – Party that purchases the bonds to guarantee performance.
Obligee – Party requiring the bond, usually protected by the bond, to ensure the principal fulfills the obligation.
The Surety – The insurance or bonding company that guarantees the obligation will be met.

Therefore, a surety bond is not insurance but a contract or agreement where the principal has an obligation to fulfill their contract. The purpose of bonds is to build trust in business transactions by demonstrating financial security and the intent of the principal or business to successfully complete their obligations and contracts.

The bond process assesses the financial, credit and work experience of the business. All three aspects affect the bond rate, with the credit score being the primary driver.

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We provide the option to quote and buy a bond on your own.

Should you need assistance we are here to help with access to multiple bond providers.

Our goal is to make sure you are correctly covered while providing a great experience.

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Bonds fall into four main categories:

Performance Bond:
Performance bonds are required by contracts to ensure projects are completed per scope and contractual obligations. Most bond claims involve a performance bond when missed deadlines have a material impact on the client.
Payment Bond:
Payment bonds guarantee payment will be made to vendors, suppliers and subcontractors. This type of bond helps to ensure contractors pay suppliers involved in project work.
License and Permit Bonds:
License and permit bonds are required by government and regulatory agencies for businesses and contractors to be licensed to operate. Often these bonds are a part of just doing business to ensure licenses stay current and active.
Any contractor who enters a residential home should be protected by a bond to guard against accusations of theft and dishonesty.
Court Bonds:
Court bonds are mandated by judicial proceedings when an individual or group has a fiduciary responsibility representing another person’s interest.

License and Permit Bond Examples

Notary Bond:
Approximately 30 states require notaries to be bonded to maintain their appointment. A few states requiring notary bonds we serve:
- - Nebraska requires $15,000, 4-year bond
  - Tennessee requires $10,000, 4-year bond
  - Texas requires $10,000, 4-year bond
Contractor Bond:
Bonded contractors demonstrate they are a step above their competition. Contractor bonds offer their customers confidence the job will be done, while dishonesty bonds offer protection to the contractor against claims.
- - Janitorial Dishonesty Bond
  - Specialty Contractor Bond (Plumber, HVAC, Handyman or Home Improvement)

Court Bond Examples

Probate Bond:
A probate bond, guardianship bond, or executor bond; otherwise known as a fiduciary bond, is a legal instrument that protects the interests of an estate or trust owner. It guarantees that a fiduciary will fulfill their legal obligations honestly and faithfully. A fiduciary is a person who is responsible for safeguarding the interests of another party, such as a trustee, guardian, or financial professional. A fiduciary bond protects heirs, beneficiaries, and other creditors from fraud, embezzlement, and other forms of dishonesty.
Appeal Bond:
An appeal bond covers the amount of a judgment while the case is being reviewed in a higher court