A Look at Surety Bonds
A surety bond is a three party contract by which the third party guarantees the performance or obligations of the contractor (or the principal) to the owner (or the obligee).
There are two categories of surety bonds, Contract and Commercial.
Contract Surety Bonds
Contract Surety bonds are a three-party agreement to complete a contract. The contractor (principal) enters into an agreement with the owner (obligee) to complete the contract and indemnifies the Surety company for guaranteeing their project with a Surety Bond. In the case of default, the surety company must either complete the project or compensate the owner for the financial loss.
There are four types of contract surety bonds:
Commercial Surety Bonds
Commercial Surety bonds are a three party agreement, required for individuals and/or businesses by statute or regulation.
License and Permit Bond
Court or Judicial Bond
Fiduciary or Probate Bond
Public Official Bond
If you have any questions about surety bonding please reach out to us via phone (text or call), email, or our contact page.