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Surety Bonds

Insurance Surety Bonds

by Michael O'Brien

Insurance surety bonds are a legal risk-transfer solution. Bonds protect the public from foul play. For example, contractors are generally bonded. This shows "good faith" that workers will finish their work reasonably as estimated. For a company to be bonded, it must have a proven record of paying all debts and fulfilling all contractual obligations. If they don't, the surety company is liable.

Is This Insurance?

Insurance surety bonds differ from traditional insurance policies. An insurance policy is more expensive. The assumption is that loss is expected. When surety bonds are obtained, the expectation is that legal obligation will be fulfilled, and loss is unexpected.

Once insurance surety bonds are obtained, the surety provider assumes the responsibility for completion. If a loss occurs, indemnity is their responsibility. Indemnify means to make whole. They must reimburse any losses or non-contract expenses.

Where to Obtain Insurance Surety Bonds

Some insurance companies just deal with surety bonds on the side. The best place to get bonded is at a company that focuses solely on surety bonds. They pay more time and attention to make sure your bond is the best solution.

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