At Thompson Insurance, our surety bonding professionals are highly skilled individuals with a precision-like focus on providing the knowledge and expertise required to give our clients the best possible results. Our core strength is on using financial analysis and strong relationships with bond underwriters to provide our clients with unsurpassed service while delivering the best bonding programs in the industry.
WHAT IS A SURETY BOND?
A Surety Bond is a legally binding, 3 Party, contract that ensures obligations will be met between a principal (whoever needs the bond), an obligee (the one requiring the bond), and a surety (the insurance company guaranteeing the principal can fulfill the obligations). A surety bond provides a financial guarantee that contracts are followed, duties are fulfilled and that regulations are followed.
TYPES OF SURETY BONDS
There are many different types of Surety Bonds that a business may need. Our experts can help you determine which types of bonds your business needs. Some very common types of Surety Bonds are:
Surety Bid Bonds guarantee that if you are awarded a contract that the bonding company will provide you a performance bond. Basically, saying that you have the ability to complete and perform the work if you are the low bidder or awarded a contract. Bonding companies have to underwrite the performance bond and determine what type of bond program you will need, prior to issuing the bid bond.
Surety Performance Bonds actually guarantee your work. If you fail to complete the project per the terms of the contract, a claim can be placed on the performance bond.
Surety Payment Bonds guarantee that you will pay your subcontractors and suppliers. Since this goes along with completing the contract in full, the payment bond is usually lumped in together with the performance bond.
ADVANTAGES OF A GOOD BOND PROGRAM
- Increases your ability to bid-on and win the types of jobs you want to work on
- Increases your credibility
- Helps you grow your business and take it to the next level
- Expert advice from your agent can help you determine how to grow your business further
HOW TO SET-UP A SURETY BOND PROGRAM
Surety bonds have been issued by insurance companies for quite a while. Standalone firms also offer surety bonds that specialize in unique products. Any company that issues a bond is likely licensed by a state Department of insurance.
The process to get a bond is similar to the loan approval process. This means that underwriters will review an applicant’s financial history, credit profile, and a host of other key indicators.
Our experts and the Bonding Company (The Surety) will analyze your financials to see what type of Bond Program your company qualifies for.
OTHER TYPES OF BONDS
- License or Permit Bonds many professions such as auto dealers, contractors, and mortgage brokers often need a License or Permit Bond in order to operate legally within a specific city, state, or municipality. License and permit bond requirements vary by each state.
- Fidelity Bonds provide protection for you or your clients from dishonest employees who may commit theft, embezzlement, forgery, or other criminal or dishonest acts. Fidelity Bonds are very different from License or Permit Bonds and Surety Bonds. Whereas Surety and Permit or License Bonds are required either by the owner of a project or by state regulations, Fidelity Bonds are an optional protective measure for companies.
I NEED A BOND. WHAT DO I DO NEXT?
Feel free to call our Bond Experts and we will help fit the type of bond you need with a surety company that will help you reach your goals. Call Charlie Carper or Drew Gunn at (205)969-6115 or via email at [email protected] or [email protected]
Surety Bond Staff
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