Bond FAQs

A surety bond is a three-party agreement where the surety (bonding company) guarantees that the principal (this is you) will fulfill their obligations to the obligee (the party requiring the bond).

• There are three parties involved:
  • The Principal: The person or business required to obtain the bond (you).
  • The Obligee: The entity that requires the bond, often a government agency or project owner.
  • The Surety: The company that issues the bond and guarantees the principal’s obligations (the insurance carrier).

• Common types include:
  • Contract Bonds (e.g., performance bonds, payment bonds)
  • Commercial Bonds (e.g., license and permit bonds)
  • Court Bonds (e.g., probate bonds, appeal bonds)
  • Fidelity Bonds (e.g., employee dishonesty bonds)

A surety bond is often required by law or contract to ensure that a business or individual will comply with regulations, fulfill contractual obligations, or protect against financial losses due to unethical or illegal actions.  Basically complete the job correctly.

• If the principal fails to meet their obligations, the obligee can make a claim on the bond. The surety carrier will investigate the claim and, if valid, compensate the obligee up to the bond amount. The principal must then repay the surety for any amounts paid. In other words, you have to repay the surety carrier.

The cost varies based on the type of bond, the bond amount, the principal’s credit score, and financial history. It usually ranges from 1-15% of the total bond amount.

• You can apply directly through our website!  We have instant bonds, or you can fill out an app if the type of bond is more complicated and requires more information.  

The surety will investigate the claim. If it is found valid, the surety will pay the obligee up to the bond amount, and the principal (you) will be responsible for reimbursing the surety for the claim and any associated costs.

• The duration depends on the bond type. Some bonds are continuous until canceled, while others are project-specific or have fixed expiration dates.

• Yes, but it may be more challenging and expensive. Some surety companies specialize in high-risk bonds for individuals with poor credit. We will work with 

• Most surety bonds can be canceled, but it depends on the bond type and the terms set by the surety. Some may require written notice or specific conditions to be met.

• A surety bond involves three parties and guarantees the performance of the principal, while insurance typically involves two parties (insurer and insured) and is meant to cover losses rather than ensure performance.

• The obligee sets the bond amount based on the level of risk and the requirements of the project, law, or contract.

• You will typically need to provide personal and business financial statements, credit history, work experience, and details about the specific obligation.