The surety, then, is the party which guarantees that either the principal will perform adequately or the obligee will be compensated for the principal's failure.
The most common type of surety insurance is construction bonding, which insures that contractors will be able to complete a construction contract and pay their suppliers and subcontractors.
The surety company is usually an insurance company that is guaranteeing the obligation of another party in a contract. In order for a company to write surety bonds, it must be licensed by the insurance departments of the states in which they conduct business. A surety bond is a contract between three parties. The obligee, principal and surety company. The obligee is the party requiring the bond and will be in receipt of the contracted work. The principal is the primary party who will be performing the contracted obligation and the surety ensures that the principal's obligation will be performed.
The Allstate Corporation bought Surety Life Insurance in 1981.
Your first step in obtaining a surety bond is to contact a surety agent that is familiar with the bonding process. There will be an underwriting process associated with obtaining the surety bond but the surety agent will be able to assist you with more detailed information. Before the surety will give you a bond, you will have to go through a rigorous prequalification process because surety (unlike insurance) is a financial backing. It is more like a credit facility than an insurance policy. Surety companies will therefore thoroughly examine you and your company to ensure that you can perform as stated in your contract or license.
Both insurance and surety provide protection against financial loss. Insurance anticipates losses and charges a premium with that in mind where surety companies expect no loss and the premium charged is a 'service fee'. Surety bonds involve three-parties the surety company, principal and obligee. Insurance involves two-parties the insurance company and the insured. With insurance the risk is transferred to the insurance company where as with surety the risk remains with the principal. The surety is providing a guarantee against loss by agreeing to be responsible for the obligation of the principal.
A surety agent is a licensed insurance agent that has experience and represents surety companies. The surety agent is able to solict and place surety bond requests.
You need to have an insurance license to transact surety. Then, you would need to establish experience in the field of surety either by working for a surety company or surety agency.
The principal is the party who agrees to perform an obligation. For example, a builder may contract to construct a building. The obligee expects the principal to fulfill a contract
In most cases, yes. The consent of surety is related to a specific contract bond that was issued and sealed. The consent addresses the obligation of the surety as it is related to that contract and should be signed and sealed in the same manner.
Yes. All surety bonds will reflect bond and premium terms in some manner. Most surety bonds are annual. A contract surety performance bond will guarantee the specific terms and conditions of the contract it references. When the job obligation is complete so is the bond.
Western Surety Company, founded in the year 1900, is an insurance company based in Sioux Falls, South Dakota. It is a leader in small, miscellaneous fidelity and surety bonds.
You can attain a surety bond through youir local insurance agent. There are also a number of on line surety providers. Among them is southcoastsurety.com.