If you have ever had to file for a lost title for a vehicle, chances are you know what a surety bond is, or at least have a good idea. But what you might not know is that surety bonds aren’t just for vehicles, and they aren’t even the most common among the 4 types of surety bonds that are available.
The four types of surety bonds are contract, commercial, court, and fidelity. So what exactly does a surety bond do? Usually, a surety bond is a promise by a guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling a contract. Basically, it is a third party insurance policy, and it protects the person requiring the bond.
So, using the DMV as an example; when you file for a lost title, the DMV will require you to get a surety bond in the amount of the value of the vehicle, this bond will cover the vehicle and allow you to apply for a bonded title which gives the same rights of ownership that a standard title would. This bond also protects the DMV and anyone with a legitimate ownership interest in the vehicle from financial loss.
So, that is the premise of a surety bond, but what do the other types of surety bonds cover? If you look at a Commerical surety bond, this is one for a company such as The Chimney Scientist, who provides chimney inspections and certifications. These are bonds that are usually required by law and are agreements that protect businesses. The commercial bond is designed to guarantee the performance and financial responsibility of a business, in addition to being in compliance with the law.
Another type of surety bond is a contract bond, and these are usually made with construction companies in mind, as a way to make sure that construction bills are paid, even if the company fails to complete the project or meet certain contract requirements. These are the types of surety bonds that companies such as Calhoun Super Structure would take out before starting a job.
In the long run, surety bonds protect everyone, and they are an essential part of doing business. They are the insurance policy and guarantee that even says if the job isn’t completed, or a mistake is made and damage occurs, that there is a financial safety net in place. Additionally, we have learned that there are many things that a surety bond covers, that aren’t just vehicles. These bonds are important, and that is exactly why you need a company like bondexpress.com on your side because they know what they are doing, and can help you get exactly the bond you need.
If you own a company or are starting a on a new job site, it is in your best interest to find out everything you can about surety bonds, and what you need. Some of it might be required by law, the rest might just cover your behind in the future.