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Who Needs a Surety Bond?

by | Jun 16, 2020 | Surety Bonds | 0 comments

Who Needs a Surety Bond?

Who needs a surety bond?  Surety Bonds, like insurance are needed by both businesses and people for a myriad of reasons. Like insurance, there is a plethora of reasons why someone or a business may need a surety bond.

Who Needs a Surety Bond

You may be asking yourself, Who needs a surety bond?  Under normal circumstances people will not know what a surety bond is and won’t know they need one until someone, a company or a governmental entity tells you that you will need a bond in order to accomplish what you hope to accomplish. The surety world is vast, and you need an experienced agent that specializes in the wonderful world of surety to help you navigate your way to success. Seaman’s Insurance Group is owned and operated by a seasoned professional that has worked with bonds on every angle. Matt Seaman has worked in Surety claims, subrogation has been a bond underwriter and now proud owner of an agency that specializes in both domestic (USA) and international bonds. 25+ years in the insurance and surety we are proud and happy to help you with all of your surety needs. The question still remains, Who Needs a Surety Bond?

Contract Bonds and Construction Bonds

Let’s say you are an artisan contractor: HVAC, Electrician, Plumber, Carpenter, Mason, or even a General Contractor and you bid for a contract or land a large project. The project owner may ask you for a contract bond like a bid bond, payment bond or a performance bond. If you are a road construction company, bridge builder or any other related company, you will likely be asked to obtain one or all of the aforementioned bonds (a bid bond, payment bond or a performance bond).

What is the difference between a Contract Bond and a Construction Bond?

As if surety bonds are not confusing enough, you may be asking, What is the difference between a Contract Bond and a Construction Bond? The answer is, not that much. To put it simply, a construction bond is a type of surety bond that guarantees the fulfillment of a contract. These contract surety bonds can be used in a myriad of industries for a plethora of reasons. We see them most frequently in the construction industry. The purpose of the contract bond in the construction industry if for securing a guarantee that a project will be completed on time and on budget. This is in accordance with the contract. A claim on the bond would be made when the contract is not being lived up to. The surety company would step in to help stop or reduce potential looses to the owner of the project aka Obligee.

What types of contract bonds exist?

The question you may have now is, what types of contract bonds exist? There are a number of Contract Bonds that you may be asked to procure. We will get into more detail in later posts for the many types of Contract Bonds and Construction Bonds. We will likely take each type of contract bond one at a time. Contract bonds include the following: Construction Bond, Bid Bond, Performance Bonds, Contractor License Bond, Payment Bonds, Supply Bond, Maintenance Bond, Subdivision Bond, Site Improvement Bond, Completion Bond and Warranty Bonds.

 

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