A surety bond is a 3-party agreement that a job will get done correctly. The obligee (the one requesting the work) will often require the principal (the one doing the work) to contact a surety bond company (the ones providing the bond) before work on certain projects can commence. Surety bonds may also be required for those who want to obtain licenses to sell certain products. The bond will be used in events where the principal breaches their contract, but the job still needs to be finished. The surety company will then pay for the loss on the principal’s behalf and even find a new contractor to work on the project for the obligee.
There are hundreds of different types of surety bonds throughout the country. They are required in many industries and come in different amounts depending on the industry and the company. Listed below are the most common types of business that must buy surety bonds:
As mentioned above, there are many more types of surety bonds than just those listed. If you want to purchase a surety bond, be sure to research the type of bond you need. As you can see, most of the industries listed serve the public. That’s because the surety bond isn’t to protect the principal; it’s to protect the public.
If you plan on starting a business in one of these industries, check to see if you need a surety bond to operate. If you are required to purchase one, contact a reliable bond company and request a surety bond quote today.