Facebook Twitter LinkedIn Dictionary definition of a surety bond A surety bond is a written three-party contract in which the Surety and Principal become obligated to the Obligee for the payment of a sum of money if the obligation set forth in…
You like to have a feeling of certainty about your decisions. How do you know if it’s worthwhile to get a surety bond? Surety bonds are all about that certainty — a way to build trust between your company and your clients.
What is a Surety Bond?
A surety bond is a relationship between a company, a client, and a surety bond provider. If things go awry and the company cannot fulfill its obligations to the client, then the surety bond company will step in to help the client.
Surety bonds are different from insurance. Insurance protects the person who holds the policty. A surety bond does not protect the person who holds the surety bond. Rather, a surety bond protects the clients of the one who has the surety bond. You can learn more about the differences between surety and insurance.
Not sure if you need a surety bond? Check out this post: 4 Reasons You Might Need a Surety Bond.
Short on time? Read our Surety Bond FAQ.
What is a Surety Bond?
Surety bonds are similar to insurance policies, but there are a few key differences. For example, while an insurance policy is a two-party agreement (between the insured and the insurer), a surety bond is a three-party agreement.
You can learn more about how surety bond and insurance are different.
With contractors, a surety bond is an agreement between the contractor, the contractor’s client, and a third party surety bond company. The surety bond company covers the contractor’s promise to complete the terms of a contractual agreement between the contractor and client.
Can I be bonded after a bankruptcy? The short answer is yes, yes you can.
Surety bonds are confusing, therefore there are many surety bond misconceptions. Incorrect information is misleading, so it is important to know the facts. Here are the most common surety bond myths debunked.
Wondering why you haven’t received any quotes yet? Your surety bond application might have gone into manual review.
All surety bond applications must go through a review process before they can be approved. Manual review means that when your information was put into the AUS (Automated Underwriting System) the computer wanted a second opinion to make an approval. The second opinion is a human, the manual underwriter.
Are you a trustworthy and financially responsible businessperson? If your business needs a bond, you’ll need to prove that you’re a good business manager. Businesses require different types of surety bonds to reassure their customers that they are responsible and established organizations.
Here are five of the most common types of surety bonds.
You’re looking for information on surety bonds but you spelled it “Surity”.
This makes perfect sense. From the earliest ages we are taught phonics. We learn to sound out the words that we hear and to pronounce the words that we read. How does this relate to surety bonds? Many people initally think that surety is spelled “surity.” This simply means that they are using their early training to learn more about an unfamiliar term that they have heard something about.
If you are among those new to the concept, consider this your introduction to all things surity!