Surety bonds are a form of guarantee for financial credit that involves three parties: the surety, obligee, and the principal. The intended purpose of surety bonds is to safeguard the party (obligee) against significant loss in the event of a default or if the principal party fails to perform its obligation, which was mutually agreed upon.
Surety bonds by trusted agents are not only part of the protocol for several trade compliance regulations, such as the governing body or laws pertaining to the industry; they're also good for instilling customer's trust in your business.
Here are some key things listed to know before stepping into buying surety bonds to help ensure you buy the right type of bonds from the right bond specialist for your company.
There Are Many Ways To Understand What Type Of Bond Is Suitable
Unfortunately, there's no one-size-fits-all approach when it comes to getting bonds for all industries. But, fortunately, the answer generally lies within the government agency or governing body of the industry.
Although there are many different types of industry-specific bonds, such as construction bonds, used car dealer bonds, contractor bonds, auto dealer bonds, health club bonds, and more, but all surety bonds fall under one of the following broad categories.
Fidelity bonds play a major role in protecting employers from losses incurred by dishonest employees and other fraudulent acts such as theft of securities or monies, forgery, and embezzlement. Whether it involves business owners or clients, fidelity bonds protect both.
Probate and Court Bonds
Probate bonds and courts bonds are a guarantee for the duties of trustees, executors, guardians, and administrators involved in the court or probate system. Such bonds are meant to ensure the proper payment of legal obligations and management of assets or trusts from an estate.
Usually required, particularly for construction workers or contractors, they ensure that the professionals will fulfill all the obligations listed in the contract and meet all project deadlines. These bonds aren't License bonds and are often needed when working with specialized projects, especially ones that involve government agencies.
Also popularly known as License and Permit Bonds, commercial bonds generally allow professionals and business owners to ensure that employees work according to the industry regulations and pertain to all laws. They also help ensure that the individual or business they work with fulfills the promised contract honestly.
Obtaining A Bond Is Easy But Needs To Be Kept Up-To-Date
Having a bond specialist company on board while bond shopping makes it a relatively straightforward process. They can help you understand the complications and basics, and guide you about the type of bond you'll need, compare the best prices for you for different sureties available in the market so that you get the best price.
Bond specialists also notify you when they require renewal so that your bonds never lapse. They also help with the requirement of keeping the bonds up to date with any significant changes in your business that reflect onto or affect the bond in any way.
If you ever change the business address, DBA name, ownership structure, coverage amount, or anything else, it will need to be updated in the bond rider.
If you’re looking for a surety agent, contact bond specialists at SuretyEZ. Our team is equipped with extensive experience and knowledge to answer all your queries about buying the right surety bonds.
Reach out to us at (800) 773-1663 or fill the form to get a free quote. We hold special expertise in various bonds, including title bonds, performance bonds, immigration bonds, lottery bonds, customs bonds, carwash bonds, appraisal bonds, contractor license bonds, and more in Los Angeles.