If your clients need reassurance that your business will follow through on its commitments, you might need a surety bond.
A surety bond is an agreement that promises you will follow through with your commitments. If you fail to follow through on your commitments, the surety bond is there to protect your clients.
Types of Corporate Surety Bonds
While surety bonds are often used in the construction industry to show that your company has a history of following through on its project-based obligations to clients, many different corporations use surety bonds to show their clients that they are a company to trust.
There are many types of surety bonds, too many to name. Here are resources pages for some popular surety bonds:
A surety bond company will only provide a bond to your business if they feel that you have a solid financial history and a history of following through on your obligations.
How Do Corporate Surety Bonds Work?
Coporate surety bonds are all about a company’s reputation for follow-through.
A surety bond is not insurance. A surety bond protects your customers.
Once you purchase a surety bond, one of two things will happen:
- If you fulfill your obligations in the bond, nothing will happen. You get to continue your work, profession, contract, and duties.
- If you fail to fulfill your obligations in the bond, someone can make a claim against your surety bond.
Surety bond claims come with a price. If the claim is determined to be valid, the surety bond company will pay the claimant up to the full amount of the bond. The surety company will then come to you for repayment. You are responsible for repaying the surety company every penny they paid out on your bond claim.
Do You Need a Corporate Surety Bond?
The process of getting a corporate surety bond involves a close look at your company’s financial and organizational history. The first step in getting a corporate surety bond is to apply for your bond.