Even in today’s world of economic uncertainty people still need to get things done. Unfortunately a lack of trust in the market can also lead to a generalized lack of trust of any outside source you might need to provide a service. It comes down to question of reliability and confidence: you need a service but need some guarantee of its completion. Exactly what could provide the surety you need?
What you need is a Surety Bond.
Understanding Surety bonds involves understanding some area specific jargon and facts you deserve to know.
While these bonds are issued by insurance companies, and have similar qualities to insurance, they are not insurance. But bonds are done through insurance companies because they have solvency and can cover the penal sum (the amount due in the case of a default).
Surety Bonds involve a 3 party contractual obligation between the following:
1) the Surety – the insurance company that will issue the bond and act as an intermediary between the Principal and the Obligee
2) the Principal – the party responsible for the total and timely completion of the obligation established within the bond
3) the Obligee – the party that is issued the bond and is the recipient of the service set within the bond
Surety Bonds are essential for ensuring conditions of set within bonds and for ensuring the appropriate award of money damages in the cause of non fulfillment. Now you can go forward with a surety whether Principle or Obligee.
While this information is reassuring, there is still some additional information about Surety Bonds. All Surety Bonds include bond premiums as part of market competition and risk. Depending on the type of bond you seek, the percentages can range Surety bonding anywhere from 1% to 20% and they could include a minimum charge or even be set to a graduated rate. Don’t forget that bonding rates can also vary according to the applicants credit
The time required to get a bond can range, depending again on the type of bond, from anywhere to same day, to a few days, to a week or more. Bond duration also vary according to type and can be from 1-3 years, the duration of a project, or a court appointed time span. So whatever type of bond you choose, make sure to do your research so you get the right bond for the right service for the right amount of time, and with the right amount of coverage. With a bond like this you have the research and guarantee of the surety to minimize your risk.
One type of Surety Bond of significance is the Contractor License Bond. These bonds are a sub-category of commercial bonds and license and permit bonds. They are important because they specify that contractors will operate their business according to all licensing regulation and statutes set in the bond form by the state. This Contractor License Bond is one of the requirement