A surety bond is an agreement among three parties, the principal (you), the surety (us) and the obligee (the entity requiring the bond). This bond covers various things such as specify taxes, protection against anti-fraud and it can also be used to specify when the payments are made. Every state has its own surety bond form. Surety bonds are imperative as a risk alleviation tool and save your business from heavy losses.
Many people confuse surety bonds with insurance, but both the tools are different. A surety bond is a contract among three parties whereas, insurance bond is a two party contract. Surety bonds protect the obligee whereas, insurance bonds protect the insured against the risk. In an insurance bond the premium paid covers the potential losses, whereas, in the surety bond the premium paid is for the guarantee the principal fulfills his obligation.
Surety bonds are worth your investment as they protect you from losses and you don’t require a tangible security. Contractors can use their assets for improving their productivity through a surety bond.
It is important to evaluate the surety bond producer as they ensure that you understand the potential claim liabilities. A reputed surety bond producer will explain you the incredible benefits of surety bond and why a particular bond is important. They explain you the legal language in the easiest way and tells you ways to avoid claims. You can avoid claims if you follow all the rules and fulfill all the contractual obligations. Ensure that you assess if the surety bond producer is looking for a sale or if they are concerned about your business. It is important that you hire a reliable and knowledgeable surety bond producer who follows all the government rules. It is important to choose a surety bond producer who has years of experience and skills.
|