Business Insurance Surety Bonds

 

Premier One has assembled surety bond products from some of the nation's leading surety bond issuers for you to choose from. With our unique technology, we can match your business risk profile with surety companies that specialize in your industry and want your type of business. We'll help you buy the right bond to ensure your performance from the right surety.

Product Summary

Surety bonds are agreements between three parties:

  • The first party is the issuer of a bond, which is called the surety (usually an insurance company);
  • The second party is the buyer of the bond (you), which is called the principal;
  • The third party is the entity covered by the bond (your client), which is called the obligee.

Under a surety bond agreement, a surety company guarantees that the bond buyer will fulfill a certain obligation he or she has made to a third party.

Unlike other forms of insurance, the entity protected by the bond is the third party, not the buyer; the surety bond buyer is the one doing the work that is guaranteed.

For example, contract bonds guarantee that a written contract between two parties will be fulfilled. Construction contracts can be guaranteed by these bonds. Some common types of contract bonds include bid, performance and payment bonds.

If you're a contractor on a construction project, you can buy a performance contract bond that will ensure your compliance with the terms and conditions of your contract. As a result, the project owner is confident that the work will get done even if you default on the project and the surety bond company has to assume your responsibilities.

What Kinds of Surety Bonds Are There?
Do I need a separate bond for each project?

There are many kinds of commercial, contract and fidelity bonds that guarantee a certain behavior or the fulfillment of an obligation. Other common commercial bonds include court judicial, court fiduciary, public official, license and permit bonds.

Court judicial and court fiduciary bonds are required in some cases by law. A fiduciary is a person appointed by a court to act in the best interests of another person who is unable to handle something himself. Fiduciaries often must provide a bond to guarantee the faithful performance of their duties.

For example, the executor of an estate may be required to post a fiduciary bond that guarantees the executor will dispose of the estate honestly and to the best of his or her ability.

Fidelity bonds guarantee the honesty of employees. Fidelity bonds cover losses arising from employee dishonesty.

What Affects the Cost of the Policy?
Information you need to provide about your business

What if my business is too new to have a track record?

Surety bond companies take several factors into account when making underwriting decisions.

For example, an insurer will evaluate whether a contractor has the skills and abilities to do the promised work. Also, a contractor's track record of fulfilling previous obligations will be considered. The financial condition of the company is another factor in the decision-making process.