What is a surety bond?
Surety bonds are a credit tool used to provide financial and performance guarantees in a contract. If one party (principal) fails to fulfill a contractual obligation to another party (obligee), then the surety promises to pay the obligee the bond amount. Listed below are some of the more common bonds we write in our office.
Common Types of Surety Bonds
Construction Related Bonds
Contractor License Bonds – Specialty and General Contractors
Performance & Payment Bonds
Right of Way (ROW) or Street Obstruction Bonds
Side Sewer ROW Bonds
Durable Medical Equipment Suppliers (DMEPOS - Medicare) Bonds
ERISA Bonds (Employee Retirement Security Act) – required by law if your business handles retirement plan funds
Janitorial Service Bond (Fidelity Bonds)
Mortgage Broker Bond
Utility Deposit Bonds
Vehicle Dealer Bond
Principal: the person or entity that is requesting or requiring the bond
Obligor: the debtor, the person or entity who is legally or contractually obliged to provide a benefit or payment to another
Obligee: the recipient of the benefit or payment
Kristie English, M.Ed.
Principal / Agent
What is the difference between a contractor’s bond and liability insurance?
The main difference has to do with which party is being protected. A bond protects the consumer or customer, up to the limit of the bond. Liability insurance protects the contractor’s business from potential lawsuits, to avoid having to pay for damages and legal fees out of pocket.
We're here to help you understand your bond options.
Call us at (833) BIG-TREE / (425) 673-7948, or use our online form to request a quote.