Bonds


What Is a Surety Bond?

A surety bond is a three party contract in which Party A promises Party B that Party C will meet a certain standard or perform a certain task. Imagine if your Big Brother promised your Mom that if You didn’t clean up your room as you promised that he’d clean it up for you. That’s how a surety bond works. The bond industry substitutes their own unusual names for your Big Brother, your Mom and You in the three party contract. They use Surety, the Obligee and the Principal. The Surety is the party who backs up the promise of the Principal to the Obligee. Your big brother is the Surety. He is backing up your promise to your Mom to clean your room. If you don’t make it happen your big brother is the one who has to come through and get it done. That’s the bond company, the surety’s, place in the three party contract. The Obligee is the party who is requiring the bond. In our case above the obligee is your Mom. She wants to make sure the room gets cleaned up. In most business cases it’s a State or municipal agency who issues licenses and wants to make sure their licensees follow the rules. In the case of a construction project it’s the owner who wants to make sure the building gets built on time and on budget. The Principal is the party that will perform the obligation, in our case above, You are the principal and you make the initial promise to clean up your room. If you are reading this you are probably the principal who needs the bond because you are the one who needs to maintain a license or perform a contractual obligation. While surety bonds are issued by insurance companies they are different from insurance. Insurance companies might look at their insurance clients with an eye to see if they are going to complete their work safely but they will look at their bond clients in a different way. They will want to make sure their bond clients have the finances needed to complete the job and the experience to work through problems.


Types of Bonds

There are hundreds of different kinds of bonds, and the list keeps growing every day as the government keeps adding new regulations. For the most part they fall into two main categories. The first is Compliance, License & Permit Bonds. The second is Bid, Payment & Performance Bonds. There are numerous individual bonds within each category.


Compliance, License & Permit Bonds

Compliance, License & Permit bonds are bonds that thousands of different licensing entities like States or municipalities require prior to issuing a business license. They are required to ensure the person or business obtaining the license complies with the terms of that license and the laws governing it. Our companies inventory virtually all these bonds from the smallest cities septic tank cleaning bond to the largest Federal Government bond. If it’s a new bond just send us a copy and we’ll negotiate with one of our companies to add it to their system.


Bid, Payment & Performance Bonds

Bid, Payment & Performance Bonds are used in the construction industry. Contractors are usually required to obtain a bid bond prior to bidding on a job. The bid bond basically guarantees that the bond company will issue a payment or a performance bond if the contractor is awarded the job. Owner or project managers hiring contractors often require the contractor to post a Payment & Performance bond (sometimes called contractor bonds or contact bonds) prior to starting the job. The payment & performance bonds promise the owner that the contractor will complete the project on time and on budget.


Here is a list of some of the Bonds we provide:


What Is a Surety Bond?

A surety bond is a three party contract in which Party A promises Party B that Party C will meet a certain standard or perform a certain task. Imagine if your Big Brother promised your Mom that if You didn’t clean up your room as you promised that he’d clean it up for you. That’s how a surety bond works. The bond industry substitutes their own unusual names for your Big Brother, your Mom and You in the three party contract. They use Surety, the Obligee and the Principal. The Surety is the party who backs up the promise of the Principal to the Obligee. Your big brother is the Surety. He is backing up your promise to your Mom to clean your room. If you don’t make it happen your big brother is the one who has to come through and get it done. That’s the bond company, the surety’s, place in the three party contract. The Obligee is the party who is requiring the bond. In our case above the obligee is your Mom. She wants to make sure the room gets cleaned up. In most business cases it’s a State or municipal agency who issues licenses and wants to make sure their licensees follow the rules. In the case of a construction project it’s the owner who wants to make sure the building gets built on time and on budget. The Principal is the party that will perform the obligation, in our case above, You are the principal and you make the initial promise to clean up your room. If you are reading this you are probably the principal who needs the bond because you are the one who needs to maintain a license or perform a contractual obligation. While surety bonds are issued by insurance companies they are different from insurance. Insurance companies might look at their insurance clients with an eye to see if they are going to complete their work safely but they will look at their bond clients in a different way. They will want to make sure their bond clients have the finances needed to complete the job and the experience to work through problems.


Types of Bonds

There are hundreds of different kinds of bonds, and the list keeps growing every day as the government keeps adding new regulations. For the most part they fall into two main categories. The first is Compliance, License & Permit Bonds. The second is Bid, Payment & Performance Bonds. There are numerous individual bonds within each category.


Compliance, License & Permit Bonds

Compliance, License & Permit bonds are bonds that thousands of different licensing entities like States or municipalities require prior to issuing a business license. They are required to ensure the person or business obtaining the license complies with the terms of that license and the laws governing it. Our companies inventory virtually all these bonds from the smallest cities septic tank cleaning bond to the largest Federal Government bond. If it’s a new bond just send us a copy and we’ll negotiate with one of our companies to add it to their system.


Bid, Payment & Performance Bonds

Bid, Payment & Performance Bonds are used in the construction industry. Contractors are usually required to obtain a bid bond prior to bidding on a job. The bid bond basically guarantees that the bond company will issue a payment or a performance bond if the contractor is awarded the job. Owner or project managers hiring contractors often require the contractor to post a Payment & Performance bond (sometimes called contractor bonds or contact bonds) prior to starting the job. The payment & performance bonds promise the owner that the contractor will complete the project on time and on budget.


Here is a list of some of the Bonds we provide:
  • Compliance, License & Permit Bonds (Commercial Bonds)
  • Administrator Surety Bond
  • Airlines Report Commission (ARC) Surety Bond
  • Amusement Enterprise Surety Bond
  • Appeal Surety Bond
  • Appraiser Surety Bond
  • Athletic Agent Bond
  • Auction Surety Bond
  • Broker Surety Bond
  • Cemetery Surety Bond
  • Cigarette Tax Surety Bond
  • Collection Agency Surety Bond
  • Compliance Surety Bond
  • Concessionaire Surety Bond
  • Contractor License Surety Bond
  • Court Surety Bond
  • Credit Services Surety Bond
  • Custodian Surety Bond
  • Defective Title Surety Bond
  • Detective Agency/Private Investigator Surety Bond
  • DMEPOS Surety Bond (Medicare Bond, Medicaid Bond)
  • Driver Education School Surety Bond
  • Employment Agency Surety Bond
  • ERISA Surety Bond
  • Estate Surety Bond
  • Executor Surety Bond
  • Federal Housing Authority Surety Bond
  • Fidelity Surety Bond
  • Fiduciary Surety Bond
  • Freight Broker Surety Bond
  • Fuel Tax Surety Bond
  • Guardianship Surety Bond
  • Health Care Professional Surety Bond
  • Health Club Surety Bond
  • Home Dealer Surety Bond (Mobile Home Dealer)
  • Home Improvement Contractor Surety Bond
  • Hunting & Fishing License Surety Bond
  • ICC Surety Bond
  • Insurance Broker Surety Bond
  • Liquor Tax Surety Bond
  • Lottery Surety Bond
  • Miscellaneous Commercial Surety Bond
  • Money Transmitter Surety Bond
  • Mortgage Broker Surety Bond
  • Mortgage Lender Surety Bond
  • Motor Vehicle Dealer Surety Bond
  • Motor Vehicle Inspection Surety Bond
  • Notary Surety Bond
  • Patient Trust Surety Bond
  • Payday Loan Surety Bond
  • Pest Control Operator Surety Bond
  • Phone Solicitor Surety Bond
  • Plumbing Contractor Surety Bond
  • Preneed Funeral Surety Bond
  • Private Employment Agency License Surety Bond
  • Private Investigator Bond (Private Investigator License)
  • Professional License Bonds
  • Private School/Tuition Surety Bond
  • Probate Surety Bond
  • Promoters Bond
  • Public Adjuster Surety Bond
  • Public Official Surety Bond
  • Real Estate Closing Agent Bond
  • Roofing Contractor Surety Bond
  • Sales and Use Tax Surety Bond
  • Sales Tax Surety Bond
  • School Surety Bond
  • Seller of Travel Surety Bond
  • Sign License Surety Bond
  • Small Loan License Surety Bond
  • Special Needs Trust Surety Bond
  • Surplus Lines Broker Surety Bond
  • Tax Collector Surety Bond
  • Tax Preparer Surety Bond
  • Title Agency Surety Bond
  • Toll Surety Bond
  • Transportation Surety Bond
  • Used Car Dealer Surety Bond
  • Utility Deposit Surety Bond
  • Veterinarian License Surety Bond
  • Warranty Surety Bond
  • Wholesale Fuel Distribution Surety Bond
  • Bid, Payment & Performance Bonds (Contract Bonds)
  • Maintenance Surety Bond
  • Payment Surety Bond
  • Performance Surety Bond
  • Bid Surety Bond
  • Site Improvement Surety Bond
  • Subdivision Surety Bond
  • Supply Surety Bond