Frequently Asked Questions
What is a Surety Bond or Definition of Surety Bond?
Technically speaking, a surety bond is an insurance product, but the similarity
ends there. Unlike an insurance policy, a surety bond does not protect the person
purchasing the coverage, but instead it protects some third party. If you are reading
this, chances are some entity asked you to get a bond. That could be a state licensing
authority like a Liquor Control Board, or the Division of Motor Vehicles, or a Court.
Literally any entity can require a bond of another. In all cases, the bond guarantees
that you, the purchaser (Principal), will perform as required by the third party
(Obligee). We have now decided to expand our services and offer them direct to you,
the public, on certain classes of bonds.
Are there different types of surety bonds?
Yes! There are two categories of surety bonds; contract and commercial. A Contract
bond allows for financial security by assuring the third party (obligee) that the
purchaser (principal) will perform the work, in addition to paying for subcontractors,
suppliers, etc. Contract bonds include bid bonds, maintenance bonds, payment bonds,
performance bonds etc. Commercial bonds guarantee performance of the principal to the
responsibility described in the bond. Commercial bonds include license and permit bonds,
public official bonds, probate and judicial bonds as well as miscellaneous bonds.
How or where can I get a surety bond?
As insurance products, surety bonds are sold through licensed insurance agencies
who represent various surety companies. However, since surety is such a specialized
field, many insurance agents lack the knowledge and expertise to properly service
this product.
What types of surety bonds do you handle?
Unlike many other bond agents, we DO NOT handle contract surety, but specialize
specifically in Commercial and other non-contract surety business. While we only
handle commercial bonds, we specialize in the simple, efficient processing of
these surety bonds.
What does a surety bond cost?
The surety bond premiums can vary depending on the surety company being used. Typically,
the bond cost can range anywhere from one half of one percent to two percent of the bond amount.
Most quoted premiums are with RLI Insurance company unless otherwise indicated. Most bonds are
$100 min. premium unless otherwise specified.
Why is a surety bond needed?
Surety bonds are required for many reasons, such as operating a business, obtaining
a license or to fulfill a requirement for local or state governments. The primary
function of a bond is to protect the general public by guaranteeing that an individual
or business will abide by the contract terms.
Is a Surety Bond the same as insurance?
The only similarity between a surety bond and an insurance policy is that they are both a
means of transferring a risk and provide for financial loss. An insurance policy transfers
risk from a policy holder to an insurance company, whereas a surety bond protects an obligee
against losses, not a policy holder.
Insurance policies are two party agreements (insured and insurer); surety bonds are three
party agreements (principal, obligee, surety). Insurance companies are prepared and structure
their premiums in order to anticipate losses whereas a surety company does not expect losses
to occur under a bond. This is why there are strict underwriting guidelines for some bonds.
Additionally, both surety bonds and insurance policies are regulated by the individual
states.
How long until I receive my surety bond?
At BondAbility, we pride ourselves on fast, efficient service to our customers. All bonds are
processed within 2 hours. Orders received by noon are mailed that day! We also have instant
electronic mail and overnight delivery available for your convenience.
What is our Privacy Policy?
All information submitted to BondAbility.com will be held confidential and will
be used for the sole purpose of communication or in preparation of a surety bond
or insurance product. BondAbility.com will not sell, rent, swap or otherwise disclose
confidential information to any third party. BondAbility accepts no liability for
information that may be intercepted by unauthorized acts of a third parties.
What is our Return Policy?
Surety Bonds are legal documents and as such the premiums charged
are fully earned upon issuance. Return premiums can only be allowed in those rare
cases were original bonds can be returned unused and it can be demonstrated to our
surety company's satisfaction that they have incurred no liability.
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Why Choose BondAbility?
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Simple Application Process
Fill out our simple online Application.
No need to wait for someone to call you.
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Competitive Rates
Great prices for good credit, reasonable prices for marginal credit.
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Bad Credit? No Problem!
We have access to bad credit markets.
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Experienced Surety Agents
We have been writing surety bonds
since 1976.
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Fast & Efficient Service
Get approvals in about an hour, not days.
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