BUSINESS INSURANCE
Surety Bonds
When a contract, license, or permit requires a bond, Legacy can help you understand the requirement and pursue the right bond for your business or project.
UNDERSTANDING SURETY BONDS
A Guarantee Built on Trust
A surety bond is a three-party agreement among the principal purchasing the bond, the obligee requiring it, and the surety company providing the guarantee. If the principal fails to meet the bonded obligation, the surety may respond according to the terms of the bond.
Common Types of Surety Bonds
Bid Bonds - Guarantee that a contractor submitting a successful bid will enter the contract and provide any required performance and payment bonds.
Performance Bonds - Guarantee that contracted work will be completed according to the terms of the agreement.
Payment Bonds - Guarantee payment to qualifying subcontractors, laborers, and material suppliers.
License and Permit Bonds - Required by certain government agencies before a business can obtain or maintain a license or permit.
Maintenance Bonds - Guarantee against certain defects in workmanship or materials for a specified period after project completion.
Commercial Surety Bonds - Bonds required for various business, fiduciary, court, or regulatory obligations.
WHO NEEDS A SURETY BOND
Meeting Contract and Licensing Requirements
A bond may be required by a government agency, project owner, general contractor, court, or licensing authority before you can bid, begin work, or legally operate.
You may need a bond when:
Bidding on a public or private construction project
Entering a bonded construction contract
Applying for a professional or contractor license
Obtaining certain business permits
Guaranteeing payment to subcontractors or suppliers
Performing work for a government entity
Fulfilling certain court or fiduciary responsibilities
Meeting another contractual or regulatory obligation
THE UNDERWRITING PROCESS
What Surety Companies Consider
Unlike a traditional insurance policy, a surety bond generally guarantees your performance or obligation to another party. The surety company may evaluate several factors before approving a bond.
Experience - Your history completing work similar in size, scope, and complexity.
Financial Strength - Business and personal financial information demonstrating the ability to meet project obligations.
Credit History - Credit may be considered, particularly for owners of closely held businesses.
Work History - Past performance, references, and any previous bond claims.
Capacity - Your personnel, equipment, workload, and ability to complete the proposed obligation.
Bond Requirements - The bond type, amount, wording, obligee, contract, and completion deadline.
GUIDANCE FROM LEGACY
Let’s Find the Bond You Need
Bond requirements can be highly specific. Tell us what has been requested, and a member of Legacy will contact you to discuss the bond and information needed to begin the application process.
Information is provided for general informational purposes only. Bond availability, terms, pricing, and approval are subject to underwriting and surety requirements. Submitting this form does not issue or guarantee approval of a bond. The terms of the issued bond control.