What are Wyoming Surety Bonds?
Bonds are, in general terms, a legal contract that promises you will abide by the terms of another contract in Wyoming. A surety can also be thought of as a mix between an insurance instrument and a credit instrument. Some surety bonds Wyoming are unique to the state of Wyoming, but many Wy sureties are of the same type that can be found in most other states.
A Wyoming surety bond is like a surety in every other state in that it is a legal agreement between three parties – the guarantor, the obligor, and the obligee – that provides a form of assurance that contract requirements will be met, and that rules and regulations will be followed.
Helpful Definitions to help you better understand
The three parties that sign off on Wyoming surety bonds consist of the person or entity that needs the bond (the principal or obligor), the person or entity protected by the bond (the obligee, who is usually the one requiring bonding), and the company that issues the bond (the guarantor or surety).
Wyoming Surety Bond
When you obtain a Wyoming surety bond, the surety takes on the risk of having to pay an obligee if the obligee incurs a loss due to you, the principal, not upholding legal obligations under a separate contract. By paying a non-refundable portion of the bond amount to a surety (the principal payment), rather than the entire bond amount needed, the principal is essentially being offered credit for which they, themselves, will ultimately be responsible.
Principals will need to apply for a surety, just as one would apply for insurance or credit. The underwriter at the surety company will want to know a great deal about the financial background of the involved principal, on both a business and personal level.
Different additional questions will be asked of the principal by the Wyoming surety, depending on the type of bond needed. For work-related surety bonds Wyoming, for example, the surety will ask about contract requirements and whether a contract surety is required or optional. The surety will also examine the capacity of the business to complete a project, based on current capacity, character, and history of performance.
Once the surety bond Wyoming is obtained, the principal then provides proof of the bond to the requiring organization or person. If the obligee incurs a loss due to the principal no upholding their end of the bargain, the obligee can then make a claim on the bond.
Normally, a principal should attempt to work out issues with the obligee before the obligee makes good on a threat to place a claim on a bond, though. The principal will need to repay the surety company any monies the surety issues to an obligee on behalf of the involved principal. Furthermore, claims on bonds can cause loss of bonding and affect the ability to obtain future bonds. This is important, as bonds are often needed for court appeals and legally required licensing and permits that must be regularly renewed.
Who Needs a Bond?
Wyoming surety bonds are sometimes either required by law, as a stipulation of performing on a Wyoming contract, or for certain future court proceedings (such as appeals on loss of a court case).
When a government agency requires a bond, they are doing so to protect the public and taxpayer money. When a surety is required by a private entity, such as a project owner or a contractor for subcontractors, the private entity is protected from financial loss.
Even you are not required to have one, you may wish to consider obtaining one nonetheless. Obtaining a surety in Wyoming will most certainly improve your odds of winning bids and improve public perception of your company’s professionalism and legitimacy.
Do I Qualify for a Wyoming Surety Bonds?
Although the financial strength of your company and/or your personal financial strength will be evaluated when you apply for a WY bond, Sureties are usually available for all credit types. Even if you have bed credit, we have programs to help you get bonded in Wyoming.
For businesses, the amount for which you qualify to be bonded, called your bonding capacity, is usually dependent on the equity of your business and the amount of working capital your business has. You will usually qualify for a bond of no more than 10 – 15 times the value of your business equity. Your business will also normally need working capital in the amount of at least 10% of the total bond amount needed.
Individuals requiring Wyoming bonds will have their bonding capacity set according to their current and past financial and credit profiles. Bonding insurance can lower the cost of Wyoming bonds for both individuals and businesses.
Types of Bonds:
The four main types of bonds are… Contract, Commercial, Fidelity, and Court. A few examples of bonds specific to Wyoming that may not be required in other states include the bond for non-resident employers, bonds for work in certain towns and cities of Wyoming, and bonds for day laborer companies employing day laborers performing work in Wyoming. In most states, all state-specific bonds fall under the four main categories above.
Wyoming contract bonds are a type of surety that ensure the obligations of a construction contract will be met while performing work in Wyoming. These are usually common to the construction industry.
Commercial Wyoming bonds ensure that licensed companies will comply with all required codes or commonly accepted industry standards. Most Wyoming commercial bonds are required by a government source to fulfill requirements for licensing.
Fidelity bonds are a type of Wyoming bond that protects an employer in cases of theft.
Wyoming court bonds offer protection against losses via a Wyoming court proceeding.
Bonded in Wyoming
If you need a Wyoming surety, contact an agency that specializes in bonds and is licensed to issue bonds in the state of Wyoming, such as NFP Surety! NFP Surety will guide you through the bonding process and assist you in preparing for your bond application. We will review your contract documents with you, if needed, to help you in making decisions on your surety bond Wyoming. We can also introduce you to other professionals and consultants, such as attorneys or accountants, who can offer solid business advice.
What we do!
Bonds give your clients confidence in your company and in the work expected. Sometimes, Bonds are required by a client or a court system, and sometimes it is just a good idea to have one.
Surety by NFP offers each the hundreds of types of bonds required by various entities in the state of Wyoming. If you have questions about Wyoming sureties, We are always glad to help! We’d love to show you how to get bonded in Wyoming.
Surety by NFP provides affordable surety and fidelity bond insurance. Every WY bond is prepared on a specific WY bond form, as prescribed by the entity requiring the bonding (known as the Obligee). Apply for your bond now by completing our online application. If you prefer, you may download an application to complete and fax or email to our agency for processing.
We know you have options, but we want you to know that we will work diligently with you, in order to make sure you are properly bonded, and answer any questions you may have. Thank you.