What is a bond?
A surety bond or simply a 'bond' is a special type of third-party coverage often requested by municipalities or project owners to protect against damage to city or state property or against problems related to project bidding or completion, such as payment to subcontractors, completion to proper standards, completion within the time frame specified and other such issues. An issuer of a bond can purchase bond insurance to guarantee scheduled payments of interest and principal on the bond to its bondholders in case the issuer defaults. Once the issuer purchases bond insurance, its credit rating is replaced with the insurer’s credit rating. Premiums are a measure of the perceived risk of failure of the issuer and are paid to the insurer in either lump sums or installments.
What are the benefits of being bonded?
Being bonded gives you the ability to leverage business growth. With the increased stature of having the insurer’s credit rating, a business can feel safer in taking risks to improve and grow the business. This is especially true in the construction and financial industries.
A bonded business can obtain unbiased criticism from a credit professional and seek advice in underwriting projects.
Some bonds we handle include, but are not limited to, the following:
- Contract performance bonds
- Bid bonds
- Maintenance bonds
- General Business Bonds
- Payment bonds
- Supply bonds
- License and permit bonds
- Miscellaneous bonds
Call us today at (512) 759-8959 and we'll be happy to explain anything you'd like to know about the bonding process.