Types of Surety Bonds

Surety Bond Types

Surety bonds are contracts between at least three parties and is usually prepared on a specific surety bond form.  Surety bonds are generally issued by an entity on behalf of a second party, guaranteeing that the second party will fulfill an obligation or series of obligations to a third party. In the event that the obligations are not met, the third party will recover its losses via the surety bond. Through the surety bond, an insurance company agrees to uphold the obligations or contractual agreements made by the principal, if that principal fails to do so. The principal will generally pay a premium for the surety bond in exchange for the surety company’s financial strength behind the bond.

Surety bonds are often mistakenly referred to as surity bonds or security bonds.  There are many different kinds of surety bonds. Contract bonds, or construction bonds, can provide financial protection in the event that a particular job is not performed as desired. Commercial, or license and permit bonds are usually required by a state, county or city and guarantee that the provisions of applicable codes and laws that apply to particular activities will be followed.  Below is a list of some of the most commonly requested bonds.

Types of Insurance Bonds

Search Surety Bonds by State. – This is the quickest way to learn about bonding specifications and requirements for each state.  The website only can help you a little bit…it’s best to reach out to our professional and friendly team of surety bond specialists.  We can write all types of insurance bonds.  Some are generic, and don’t have an exact name, but if you call us, we’ll figure it out together.