Surety bonds are required in multiple situations. It’s a contract between three parties – the individual needing a product, work or service, the company or individual providing the work, service or product, and the issuing entity of the bond. It essentially says that the issuer will cover any liability on behalf of an individual or company for a debt, failure, or the quality of their work.
The list of individuals and businesses that need a surety bond is long and varied. It includes contractors, telemarketers, auto dealers and travel agencies. Collection agencies, public adjusters, and many public officials need surety bonds.
Multiple types of specialized miscellaneous surety bonds are also issued for businesses such as utility companies, lottery-ticket sellers, and auctioneers. Also included under that umbrella are fuel sellers, electricians and pipe layers, along with credit unions and warehouse and agricultural companies.
Businesses that sell, manufacture or store alcohol need a surety bond, along with ship, yacht and freight brokers. It demonstrates to customers and clients that the individuals and businesses they hire will fulfill their contractual obligations.
Two categories of surety bonds are issued. The first is contract surety bonds which are typically written for construction projects. The second type is a commercial surety bond, often referred to as a miscellaneous surety bond, and includes a wide range of individuals and businesses.
Surety bonds can help businesses acquire customers by proving that they’ll deliver on the work, products or services that are promised. They’re especially beneficial for small contractors and business owners. It’s a legally binding contract between consumers and the businesses they hire or with which they conduct commerce.
For those that need a surety bond, there are multiple concerns to consider. The maximum bond coverage that a business can obtain is determined by their cash flow, managerial experience and working capital. Bond terms are typically for 1 to 4 years, depending on the business, and they’re renewable.
For more information about how The Sena Group can help you with any
of your insurance needs, please contact us at 561-391-4661.
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The Sena Group
6501 Congress Ave., Ste. 100
Boca Raton, FL 33487