Surety Bond Definitions / Information about Surety Bonds
What is a surety bond
A Surety bond is a generic term for all bonds so it can become confusing at times when applying for one, but feel free to contact us with any questions you have. There are many different types of surety bonds normally they are required to obtain a specific license. A Surety Bond is a three part agreement , The Principal, Municipality / Private Obligee, and Surety Company. The Principal is the business or individual applying for the surety bond. The Obligge is the one requiring the Surety Bond. The Surety Company is the one writing the surety bond
Who requires the surety bond
Surety Bonds are bonds required by Private Industry, Municipalities, States and the Federal Government for making sure that the principal abides by the governing laws as well as policies or a contract. The Obligee requires the surety bond to protect its self or the consumer from fraud or whatever is specified in the surety bond form.
What happens if I get a Surety Bond Claim
If a surety bond claim occurs, you must restore the surety company to the financial position it was once before the claim occurred.
What is a surety company
A Surety Company is the one that will be issuing the surety bonds. A Surety Bond Company must be Licensed, admitted by the department of Insurance for your state to issue bonds for the state the surety bond is for. You can always check with Ambest to verify a rating of a Surety Company. A T-Listed Surety Bond Company means that the Surety Company is Holding Certificates of Authority as Acceptable Sureties for The Federal Government (Department Circular 570) (T-Listed).
What is a Surety Bond Form
A Surety bond form
A Surety bond form can be laws, statues, regulations or a contract that is written in a way to protect the obligee from the principal if the principal violates it. A Surety Bond form is different for each obligee normally the obligee will provide the surety bond form to you upon request or they will include a copy of one in your licensing packet.
What is the Surety Bond Amount
The surety bond Amount varies for each Obligee so always be careful to fill out the correct surety bond amount on the Surety Bond Application. Some Obligees will have a set surety bond amount while others will use a calculation which they will give you based upon gross volume, products sold customers serviced ect.
Surety bond Effective Date/Expiration Date
Most of the time surety bonds run annually but some surety bonds have a specific expiration date or a specific effective date. Florida requires all MVD bonds to expire at the end of April while other States requier the day that your licensed was issued as the expiration date for the following year. Always check with the state to see if you fall under this category.
Extending the term of your surety bond
You can extend the term of your surety bond if you pay additional premium for the extended period. This is a good idea so you do not have to worry about qualifying for the surety bond next year
Surety Bond Application
Applying with our company is easy you can complete a Surety Bond Application online which only takes a few minutes and approvals are usually handled with in twenty-four hours.
Surety Bond requirements
Each Surety Company has different requirements for each Surety bond type. The Surety Bond company will evaluate credit, financials and experience to determine if they will extend surety credit. Do not worry if you have been turned down for a surety bond or if you do not meet the normal surety bond requirements we can help! We can bond almost any one without collateral for most licenses and permit surety bonds call fell free to call and ask about our bad credit surety bond program.
Surety Bond Cost
Applying for a surety bond is free with our company the surety bond cost varies for each bond type as well as for credit experience and financials. The cost of the surety bond can be anywhere from a half of a percent to twenty five percent of the bond amount If you want to learn more about surety bond cost feel free to view our surety bond blog