In the business world nothing is absolute that’s why having a guarantee is crucial

We understand that bonds are time sensitive and vital to the completion of a project. Because each project is different there is not one type of bond that will fit every job. Contact us today and we will help you find the right policy for your project.

What is a surety bond?

As opposed to insurance, which is a two (2) party contract between an insurance company and the insured, a surety bond is a three (3) party agreement between a Principal, an Obligee, and a Surety. As a condition of being granted certain licenses, permits, contracts, or prior to assuming duty as a public official entrusted with funds, or a court appointed fiduciary, it is required by many state and local governments (as well as the Federal government in many cases) that the party assuming the responsibility (the Principal) provide the requiring governmental body (or private party in some instances) (the Obligee) with a guarantee that the Principal will perform all of the requirements of the code and/or contract and/or the governing document or in lieu thereof the party making the guarantee (the Surety) will either perform the obligation themselves or pay a stipulated sum of money. A surety bond is an extension of credit in the form of a guarantee that provides protection to the party requiring the bond (the Obligee), but provides no insurance to the Principal.

What kind of situation can be bonded?

Virtually any obligation or agreement that is not insurable or in violation of public policy can be bonded. The most commonly required types of surety bonds utilized by the public on a daily basis are:

  • Permit Bonds – guarantee that a licensed party will comply with the code in a particular situation permitted by the local governing body.
  • Public Official Bonds – guarantee that a person in a position of being an elected or appointed official will faithfully and honestly perform the required duties of the job according to law.
  • Contract Bonds – guarantee that the contractor principal will perform the contract (building, road, sewer, materials supply, etc.) in accordance with the plans and specifications of the specific project and pay all required labor and material bills.
  • Court Bonds – guarantee that the Principal will pay the court or some other Obligee a sum of money including costs and interest if they unsuccessfully appeal a money judgment; wrongfully attach or replieve property; wrongfully file a restraining order, or any other obligation required of a court.
  • Probate Bonds – are filed in a Probate Court and are required in most states to protect and preserve the assets of an estate of a deceased, incompetent person, or minor. The court appointed guardian, executor, administrator, trustee, or similar person must post the bond with the court to guarantee their honesty and faithful compliance with the law as well as the terms of a will, trust agreement, or court order which stipulates the conduct required of them.

What would create a claim under a surety bond?

The Principal’s failure to fulfill his obligation would create a claim against a Surety.

Who can make a claim under a bond?

Usually, only the holder of the bond (the Obligee) can make claim under the bond. The Principal can never make a claim.

What happens if a surety has to pay a claim?

A Principal is legally obligated to reimburse the Surety Company for any loss and expense incurred by the Surety. The Principal’s obligation to the Surety can, therefore, be greater than the original obligation to the obligee. The Surety has the same recourse against the Principal as any other creditor would have in recovering their loss. This is the primary difference between a surety bond and insurance.

More Business Insurance Links


Almost every business may face a loss due to its owning, renting, using, or loading/unloading a vehicle. Most coverage needs can be handled by a business auto policy (BAP) or similar form. BAPs may cover a variety of operations, including trucking, garaging, public and private transport, and businesses with auto exposures that fall outside the other classes.


Workers Compensation insurance policies actually provide two types of protection. One covers the cost of medical expenses and disability payments if employees are injured or exposed to illness-causing substances while on the job. The other provides businesses with liability protection in case they are sued for damages arising from employment-related accidents or diseases


Commercial property policies provide coverage for buildings and personal property that are used in a business. Protecting this property must be a primary goal of any commercial insurance program. Regardless of the size of the business, tangible property usually represents a large portion of its total assets.


Whether a human services, arts, educational, civic or other type of nonprofit, your organization should be protected by liability insurance to cover defense costs and damages. Some insurers specialize in coverage for nonprofits and may be able to best meet the insurance needs of your organization.


Commercial General Liability (CGL) Policies are extremely broad in nature. They insure the bodily injury liability and property damage liability exposures of a variety of commercial businesses, enterprises and ventures.


A Commercial Umbrella Liability Policy, increasingly referred to as an excess policy, can provide an additional layer of insurance protection to handle major losses. A business owner may consider an accident that does not involve a fatality to be one that can readily be handled by regular coverage. The reality is that such an accident may result in substantial medical care, lost income and other expenses.


If you own a small business, your insurance needs may be properly handled by a business owner policy or BOP. BOPs are similar to a homeowners policy, offering both property and liability protection. Businesses such as retailers, wholesalers, small contractors, artisan contractors, dry cleaners, restaurants, offices, and convenience stores (including those with gas pumps) are eligible for BOP coverage.


As opposed to insurance, which is a two (2) party contract between an insurance company and the insured, a surety bond is a three (3) party agreement between a Principal, an Obligee, and a Surety.

Beyond Insurance.

Frequently people go for years without reviewing their insurance program, even though life quickly changes. By answering a few questions, you can have the peace of mind knowing that your family and possessions are protected.