What You Need to Know
A Surety Bond (insurance policy) is a written contract among at least three parties that promises an obligee (recipient of an obligation) that the principal (primary party performing the obligation) will perform the contractual obligation. The principal is responsible for taking out a surety to assure the obligee.
- Contract/Construction Bonds guarantee a contract for construction, service or supply of goods will be completed. This assures the obligee that a project will be completed by the surety if the principal fails to do so.
- Examples: Bid, Performance, Payment bonds, etc.
- License/Permit Bonds are required for business owners in certain industries before they can be legally licensed by government agencies.
- Examples: Contractor License, Highway and Street Permit, Agent/Adjuster/Broker License, Fuel Dealer, Professional License, Automobile Dealer, Alcoholic Beverage Compliance Bonds, etc.
- Public Official Bonds guarantee the honesty and faithful performance of a public official's duties as prescribed by law or regulation.
- Examples: Notary Public, Sheriff, Deputy Sheriff, Constable, Jailer, Court Clerk, Loan Closing Attorney, County/City/School Treasurer Bonds, etc.
- Court Bonds are required at significant points in the litigation process. The Bond protects the opposing party from loss suffered as a result of the court’s having temporarily granted a specific privilege.
- Examples: Plaintiff Replevin, Plaintiff Attachment, Foreclosure, Release of Lien, Cost Bonds, etc.
- Probate Bonds are key tools for protecting property and people when a person passes away. Upon death, an individual's estate is handled through probate court.
- Examples: Administrator, Executor, Guardian, Trustee Bonds, etc.
- Fidelity Bonds protect a business from acts of employee dishonesty beyond the limits of most packaged products for company monies, securities and other property.
- Examples: ERISA (Pension Plans), Business Services Bonds (Janitorial)
- Commercial Crime Bonds are also available, which cover losses due to burglary, robbery, fraud, forgery, disappearance, etc.
Want to find out more about your Business Insurance options?