What are surety bonds?
A surety bond is a contractual agreement between a project owner or business guaranteeing that a project will be completed or business regulations will be followed.
Surety bonds guarantee that specific tasks are fulfilled. This is fulfilled by bringing three parties together in a mutual, legally binding contract.
The principal is the individual or business that purchases the bond to guarantee future work performance.
The obligee is the entity that requires the bond. Obligees are typically government agencies working to regulate industries and reduce the likelihood of financial loss.
The surety is the insurance company that backs the bond. The surety provides a line of credit in case the principal fails to fulfill the task.
How do claims work?
The obligee can make a claim to recover losses if the principal does fail to fulfill the task. If the claim is valid, the insurance company will pay reparation that cannot exceed the bond amount. The underwriters will then expect the principal to reimburse them for any claims paid.
Who needs surety bonds?
There are many instances where a business will require specific types of surety bonds. Here are a few of them.
• If you are starting a business, you may need a license and permit bond before you get your business license. These bonds protect consumers by guaranteeing businesses adhere to laws and other regulations enforced by federal, state and local government agencies.
• If you need to guarantee that a contracts terms are met, a contract bond may be necessary before you can work on a publicly funded project.
• If you own a business and need to protect your clients against employee theft, a business service bond will cover this.
Here are the surety bonds we offer:
Auto dealer bonds
DMV defective title bonds
Call our office today for more information and a fast, easy quote! Please call (760) 318-4099!