Sometimes, insurance doesn’t contain the word insurance or policy. That’s the case with surety bonds. When you read that a business presented a surety bond to the city or that your business needs to obtain a surety bond, it describes an insurance purchase. Here at Holmes Insurance Services, we can assist you with the four types of surety bonds when a Youngsville, NC business needs to obtain them.
Surety Bond Defined
The term surety bond or surety bond insurance refers to a legal document that promises a business or organization will complete the task specified in the bond. The bond contract includes provisions that protect the obligee (the government) if the principal (the business owner) named in the documents fails to complete the task or comply with the agreement. The surety or insurer serves as the middleman between the obligee and the principal.
The obligee doesn’t allow the project to start until the principal obtains the surety bond insurance. The policy purchased must contain the following:
- proof of sufficient funds to complete the project,
- professional abilities to successfully complete the project,
- proof of a positive corporate image,
- proof of appropriate business management practices,
- documentation of a positive reputation with financial lenders,
- a proper line of credit.
Once obtained, the principal can alter the surety bond by adding a rider. The available riders for a surety bond include increasing the bond amount, changing the bond’s date or bond terms, and rectifying an error in the original bond.
Types of Surety Bonds
Like most forms of insurance, the surety bond offers a variety of policy types. The term surety bonds insurance refers to the following four types of policies:
- court surety bonds – required before embarking on a civil court proceeding, this bond confirms the financial liability of the parties if they refuse to comply with the court’s orders,
- commercial surety bonds – compulsory insurance that a government requires to protect the public’s welfare against fraud, misrepresentation, and dishonest practices.
- contract surety bonds – used in the construction industry, this bond promises that the contractor will comply with the bond’s terms and that the obligee pays the contractor on time. Each organization obtains its own surety bond.
- fidelity surety bond – ensures an employer offers financial protection to its employees from mismanagement, theft, and illegal activities.
Give Us A Call
Contact Holmes Insurance Services, serving Youngsville, NC, to obtain a surety bond for your business. We offer all four types of surety bonds and all riders.
Once you’ve determined you need a surety bond to conduct business in the Youngsville, NC area, you can get started on the surety bond application process. Fortunately, the process is quite easy and involves a few simple steps.
Here’s what you need to do:
Figure out the bond type and amount
The three most common types of bonds in North Carolina are bid, performance, and payment bonds. But no matter the type of bond, you can expect the cost of your surety bond to be somewhere between 1% and 5% of the total bond amount.
Collect information required for the application
This includes your business name, license number (if applicable), address, and owner information.
Obtain your free no-obligation quote through Holmes Insurance Services
Opting to work with our surety bond experts means choosing professionals who have your best interests at heart and offer competitive rates.
Purchase your bond
By working with one of our surety experts, you’re working with professionals who are fast and efficient and keep your information secure. Although the amount of time it takes to receive your bond after purchase depends on different factors, such as the type of bond, you can generally expect to get it within three days.
File the surety bond
You’ll have to get in touch with the obligee to determine if they need a digital or raised seal. Once that part is out of the way, you can sign your bond as the principal before submitting it to the obligee. After that, you’re all set!
Give Us A Call
As you can see, the surety bond application process is quite simple and painless. And, with the help of our surety bond professionals at Holmes Insurance Services, we can make the process even easier for you. Serving the Youngsville, NC area, our surety experts can help you with all your surety bond and insurance needs. Contact an agent now to get a free no-obligation quote.
Holmes Insurance Services provides coverage to the Youngsville, NC community. We offer our clients multiple policies so that they are protected in any situation. We want to help our clients live comfortably.
Surety Bonds Insurance Explained
Surety bonds are a legal contract between the guarantor, obligee, and principal. You would be considered the principal while the guarantor insures you. Surety bonds are protection if your Youngsville, NC business is unable to perform a service. You can tailor the surety bonds to meet your individual needs. There are several types of surety bonds. Bid bonds protect the owner in the event that the project does not meet the standards outlined in the contract. Performance bonds insure the contract owner against a possible default.
As a business owner, you can also look into commercial surety bonds. Commercial bonds may be required by a state or federal government in order to complete a project. This ensures that the project adheres to the regulation. If you are a lawyer, you can inquire about judicial bonds that help make sure that the judicial proceedings run smoothly. Notary bonds are another option, as they can protect the public if a notary does not adhere to the procedures outlined in the contract.
While researching surety bond insurance, remember that there are different requirements based on the city, country, or state that you are trying to get a surety bond in. You have to be aware of what the obligee is requiring from you before making a decision. Surety bonds are essential for completing transactions.
Holmes Insurance Services Will Guide You Through The Process
Visit our website to learn more information about surety bonds insurance.