Bonds in North Carolina
Surety bonds are a way to guarantee that a certain task will be fulfilled through a legal contract. From bid bonds to payment and performance bonds, Holmes Insurance Services can help you navigate surety bonds in Youngsville, NC.
What Are Surety Bonds?
A surety bond is a type of legally binding contract that involves three parties: the principal, the obligee, and the guarantor (or surety). The principal is the person who purchases the surety bond (you), while the obligee is the person or organization that requires you to purchase a surety bond. The surety or guarantor is the insurance company (us) that makes the financial guarantee to the obligee on behalf of the principal. Surety bonds are essentially insurance that covers the financial side of things if you're not able to perform a service.
Common Surety Bonds
There are a few types of surety bonds that are common in North Carolina, but it depends on what you need out of a bond. Three of the most common types of surety bonds in North Carolina include:
- Bid: The bid portion of a bond ensures that the successful bidder on a contract will move forward with the process, which includes purchasing both payment and performance bonds.
- Payment: A payment bond essentially guarantees that a contractor will pay subcontractors who they work with.
- Performance: A performance bond guarantees a contractor will complete the work they're obligated to complete in accordance with the contract.
When Do You Need Surety Bonds?
Surety bonds are especially important for contractors who bid on projects and work with subcontractors. In fact, many business transactions require that you have surety bonds, so every business owner should be familiar with them.
If you run a business, surety bonds are an important part of what you do. In fact, your Youngsville, NC business may be required to obtain surety bonds in some cases. Fortunately, we can help. Contact an agent at Holmes Insurance Services to get a free surety bonds quote today.