Surety Bonds

Surety bonds provide financial guarantees that contracts and other business deals will be completed according to mutual terms. Surety bonds protect consumers and government entities from fraud and malpractice. When a principal breaks a bond’s terms, the harmed party can make a claim on the bond to recover losses.

Surety bonds play a major role in countless industries across The United States. Each surety bond issued acts as a three-party contract between a principal, and oblige and a surety.

·        The principal – a business owner or other professional purchases the bond to guarantee the quality of work to be done in the future.
·        The obligee – most of the time a government agency, requires the principal to purchase a bond to avoid potential financial loss.
·        The surety – a surety bond company, issues the bond and financially guarantees the principal’s capacity to perform a specific task.

There are four types of surety bond: License and Permit BondsConstruction BondsCommercial Bonds, and Court Bonds – each lends itself to its respective field.

surety bondsThousands of surety bonds exist, but some of the most utilized include:

·        Auctioneers
·        car dealerships
·        janitorial services
·        mortgage brokers

Before contacting a surety provider, it is important to check all federal, state and local regulations regarding surety bonds in their respective industries. Regulations regarding a specific surety bond in California will vary from those that apply to a surety bond in Texas.

Bank Bonds – pdf

Swingle, Collins & Associates specializes in surety bonds. The descriptions of coverages listed on this website are brief and subject to the provisions, limitations, and exclusions that can only be expressed in your policy and related endorsements. For additional information of how Swingle, Collins & Associates can assist in meeting your needs for surety bonds please contact your dedicated risk manager to discuss benefits and services.

The information contained on this page is provided for informational and educational purposes only. It contains general information on insurance issues and may not reflect the most current developments in insurance coverage and is unlikely to apply in all factual scenarios. The information does not include all the terms, coverages, exclusions, limitations or conditions that may be contained in the actual insurance contract language. The policies themselves must be read for those details. Sample policy forms will be made available upon reasonable request.

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