Blog – Info for Contractors!

Where to Get a Surety Bond

Where do you get a Surety Bond? You can get a surety bid bond from a surety bond broker.  This broker connects you or your company to a surety company, usually an insurance company.  A surety company provides a guarantee that the Obligor will do the job contracted.  This gurarantee makes sure that the Obligor performs per the terms of the contract, for the benefit of the Obligee.  This guarantee is called a surety and is most commonly a corporate surety. Surety Bond Companies Most surety bond companies in the United States are insurance companies.  The insurance companies have large risk-averse divisions that write surety bonds.  The surety bond companies have historical data on the industries that they write bonds for.  They can mathematically determine default rates as well as predict losses in those industries. Corporate Sureties Although most sureties in the United States are insurance companies, there are also those that are corporations.  Some companies are willing to provide a guarantee on behalf of another company.  This is usually done by a corporate entity that has worked with another entity for many years, such as a general contractor on behalf of a subcontractor. Personal Sureties Traditionally, a surety was an individual that was willing to stand behind another person.  This was done many times in the early settler days of the U.S. when a person would provide a guarantee based on the reputation of another person. Please follow us on our Facebook page and our Twitter feed.  

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Who issues surety bonds?

Entities that Issue Surety Bonds Surety bonds are usually issued by large insurance companies, but they can also be issued by individuals or other companies. Why would someone issue a surety bond? Corporate sureties issue bonds for a fee.  However, individuals and companies could issue a bond because: Companies that issue bonds Companies that issue bonds are ones that are backing the performance of another entity.  This can happen when the two companies are so intertwined in their dealings to vouch for each other.  It can also happen if one company is completely comfortable with another one and is willing to guarantee their performance People that issue bonds In the old days, people were the ones that issued surety on behalf of another.  In the modern world, this does not happen nearly as often, but it does happen. You can get a great surety bond from us here.

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