A surety bond is a legally binding contract between three parties: the principal, the obligee, and the surety company.
It is a financial guarantee to the Obligee on behalf of the Surety that the Principal will complete a service in agreement with the regulations stated in the surety bond.
The Principal(s) is the person(s) or the business name stated on the bond. This is the entity whose actions the bond covers.
The Indemnitor(s) is the person(s) who is held financially responsible for any damages within the terms of the bond. In almost all cases, the principal is an indemnitor, as well as anyone else with ownership of the business and their spouses. Spouses are included to prevent any transferring of assets in the case of a claim.
Commercial Bonds: Up to this point we’ve primarily discussed Commercial Bonds, which are the majority of bonds most small business and individuals run into. Commercial Surety Bonds are often related to a specific license or permit. Some of the most common bond types include:
There are over 10,000 different types of commercial bonds within the United States. Some of the most fun and interesting surety bonds that we’ve come across include:
If you are looking for a commercial bond, you can access and apply for thousands of them directly online at EZSuretyBonds.com.
Contract Bonds: Contract Surety Bonds are a little different. These bonds provide financial security to the project owner (Obligee) that the contractor (Principal) will perform the work and pay their subcontractors, laborers, and material suppliers. The most common Contract Surety Bonds include:
Most Contract Surety Bonds are associated with the construction industry, however, there are some instances in which non-construction related contracts may be bonded. Common industries that require a bonded contract include security guard services, janitorial services, transportation, and material suppliers. If you need a contract bond, contact us and we will be happy to assist you.
You’ll know if you need a surety bond because some entity will have required you to obtain one. They must also inform you of which specific bond type you’ll need. There are thousands of bonds across the country, all of which vary by state and industry.
Visit EZSuretyBonds.com to browse hundreds of bonds by state, type, or industry.