A surety bond is a 3-party contract between the principal, obligee and surety carrier. The principal is who’s being required by the obligee to post the surety bond. The obligee requires the surety bond to transfer the risk of the principal’s performance from the obligee to the surety carrier. If the principal does what they
Surety bond underwriting is the pre-approval evaluation by the surety of both the bond performance requirements determined by the obligee and the principal’s current financial situation to assess the risk related to the performance criteria and the principal’s ability to reimburse the surety should a claim occur. Bonds are financial guarantees of the principal’s performance to established criteria by the obligee.
Let’s say a school would like to do business with John’s Construction Company to build a new gymnasium. If only there was a way to guarantee the company will do the work they said they would do for the school. This is where surety bonds come in. A surety bond is a financial guarantee of
Since there are thousands of different bond types and varied financial conditions of the principals that need bonds, there is a wide range of premium rates. So it’s understandable that the cost of your specific bond need depends on several factors. In general, surety bond premiums run 2-4% of the bond amount. This means in
Which bond application do you need for your specific bond? Our one page bond application suffices for most bond types under $100,000 and has been approved by multiple surety carriers. A surety bond application is a form required by the surety carrier. It provides the basic information needed about the bond and the principal for
Have you ever heard a company say they are bonded and insured? Those are stated separately because surety is not insurance. However, if you have ever been confused about how they are different, you are far from alone. There are even some insurance agents that don’t fully understand surety bonds. Surety is often looked at