Surety Bond Insurance

This type of insurance policy is a three-party agreement where the surety guarantees the principal's fulfillment of obligations to the obligee. It is commonly used in business and construction to ensure compliance, financial security, and obligation fulfillment.

Components

  • Surety: The insurance company or bonding agency that provides the bond, guaranteeing the obligations of the principal after assessing their risk and financial stability
  • Principal: The party purchasing the surety bond, whether an individual or a business entity, to demonstrate their capacity to fulfill a specific obligation or contract
  • Oblige: The party protected by the bond, who receives the guarantee from the surety and can make a claim if the principal fails to fulfill their obligations

Categories

  • Contract Bonds: Ensure contractors fulfill obligations in construction projects, including timely completion, quality standards, and payments to subcontractors
  • Commercial Bonds: Cover various obligations beyond construction contracts, such as license/permit bonds, court bonds, and customs bonds
  • Fidelity Bonds: Protect employers from losses due to employee theft, fraud, or dishonesty
  • Judicial Bonds: Required by courts to secure legal rights in proceedings, including appeal, guardian, and administrator bonds
  • Public Official Bonds: Assure ethical and lawful performance of individuals in public offices or positions

Costing

  • The bond cost is a percentage of the bond amount, varying based on risk and the principal's financial strength
  • If the principal fails to fulfill obligations, the obligee can claim against the bond, and the surety will compensate up to the bond amount

Claim Process

1

Notify the surety company

2

Submit claim documentation

3

Surety investigation

4

Determination of liability

5

Payment or performance

6

Principal's reimbursement

7

Dispute resolution

8

Thank You

Note: The claims process can vary depending on the specific circumstances and the policies.

Meet The Team

Our team works with a unified vision of delivering best-in-class services in relation to broking, client servicing, underwriting, risk management & more.

  • Milind Techchandani

    Vice President

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