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3 Ways Surety Bonds Protect Consumers

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Surety Bond

Quality product, paired with unparalleled customer satisfaction, can make any business. One way to keep your customer satisfied is by having their best interests at heart—and surety bonds can help with that.  

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The Significance of Work in Process Reports

dave
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Bonds

When applying for a surety bond, a surety agency may ask you (the principal / the contractor) to submit certain financial documentation. The company relies on these documents to determine your financial worthiness.  

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Types Of Contract Bonds – Infographic

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Bonds

Bid Bond - A bid bond reassures a project owner that the contractor has a relationship with a surety company. So, if the contractor is a low bidder and enters into the contract, he will be able to provide the required performance and payment bonds.  

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Medical Marijuana Surety Bond In Oklahoma: The Main Benefits for Dispensaries

dave
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Surety Bond

For medical marijuana dispensary owners in Oklahoma, the need to obtain a surety bond is essential. Recently, a number of states have legalized marijuana for both recreational and medical purposes.  

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5 Major Contract Bond Red Flags

dave
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Bonds

As the name implies, a contract bond guarantees the performance of a contract. It involves three parties: the project owner (obligee) who enters a contract with the contractor (principal) to fulfill the terms of conditions of the contract. The third party is the surety agency, that issues a contract bond to the contractor.  

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Things You Need To Know About Airline Bonds – Infographic

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Bonds

Airline bonds, also known as ARC bonds, are surety bonds that the travel agents should have before they are provided with pertient information and allowed to give airline tickets.  

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Maintenance Bond: How Much Does It Cost?

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Bonds

Also known as a warranty bond, a maintenance bond is used in the construction industry. The bond is designed to reduce risks, protect project owners and ensure that contractors perform quality work. This means that contractors must use quality materials and adhere to fundamental building codes, construction standards and state construction laws until the project is completed. If a contractor fails to do so, the project owner can file a claim against a maintenance bond and receive payment. Maintenance bonds are applicable to public construction projects. In some cases, private project owners may ask contractors to obtain a maintenance bond. These bonds are only valid for a specific time period.  They can provide cover to a project owner for a limited time period. This is usually 12, 18 or 24 months. If an issue arises during the specified time period, the project owner can file a claim and seek financial compensation (up to the bond amount). They cannot file claim once the bond is no longer valid.

Primary Parties

Broadly speaking, the primary parties involved include:
  • The principal (the contractor who is required to obtain the bond)
  • The obligee (the project owner who requires the bond)
  • The surety agency that issues the bond.

Evaluating the Cost of a Maintenance Bond

Maintenance bond cost is a percentage of the bond amount ($50,000 maintenance bond; $500 and $2000 premium). A surety agency considers a number of factors to calculate the amount of the bond. These factors include but are not limited to:
  • The amount of coverage required
  • The principal’s experience in the construction industry
  • The principal’s financial records (financial statements, including income statement, cash flow statement, etc.)
  • The principal’s credit score
The higher a contractor’s credit score, the lower the bond premium will be. Generally speaking, you can expect a premium of 1 to 4 percent (of the total bond amount) if you have an excellent credit score. In case of low credit scores with poor financial history, the bond is not issued. If you have any questions or need to apply for a maintenance bond, get in touch with us. With over 60 years of combined experience, our qualified underwriters can handle all the details and ensure you receive a maintenance bond as quickly as possible. We can help you obtain the best rates possible.

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Surety Bond Modification: Is it Allowed?

dave
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Surety Bond

Wondering if a surety bond can be changed after it has been written? The simple answer is yes. Under a surety contract, a principal is allowed to make changes to the bond. They can have any information changed, corrected or canceled anytime.  

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What is a Telemarketing Bond – Infographic

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Bonds

Learn more about telemarketing Bonds  

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Surety Bonds and Collateral

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Surety Bond

If you have decided to apply for a surety bond, the good news is that the bond application process is quite simple. You will be required to fill an application form and provide supporting documentation to a surety company.  

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