Sometimes, a business may be required to have a surety bond to guarantee that work they are contracted to do will be accomplished. Each surety bond must be uniquely tailored to meet specific needs.
There are three parties involved in a surety bond: the principal, the obligee, and the surety. The principal purchases the surety bond to guarantee quality and completion of contracted work. The obligee is the entity who requires the principal to purchase the bond. The surety is the entity that issues the bond and financially guarantees the principal’s ability to complete the contracted work.
If the principal does not complete the work as contracted, the obligee can make a claim for payment from the bond up to but not exceeding the bond amount. The principal is then obligated to pay back the claimed amount to the surety.
There are many types of bonds, everything from School District Treasurer Bonds, Guardianship Surety Bonds, ERISA Bonds, and many others.
Claim Examples
A business performs all of the necessary background checks when hiring employees, but nonetheless, they employ hundreds of workers that go into clients’ homes and it's impossible to totally eliminate all chance of theft. As a result, the business has been purchasing a Business Service Bond, for theft of client property. Most recently, there were allegations of credit card theft where identification was stolen, and a credit card was opened in the client’s name. The bond is called to respond for these allegations and pay for loss.
Coverage Features
- Simple Applications
- Multi Year Bonds available for some coverages
- Flexible Payment Terms
- And much more!
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