A Surety Bond is a written agreement where one party (the surety) obligates itself to a second party (the obligee) to answer for the default of a third party (the principal).
Types of Surety Bonds:
Bid bonds – provide financial assurance that the bid has been submitted in good faith and that the contractor intends to enter into the contract at the price bid and provide the required performance and payment bonds.
Performance bonds – protect the owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.
Payment bonds – guarantee that the contractor will pay certain subcontractors, laborers and material suppliers associated with the project.
Maintenance bonds – guarantee against defective workmanship or materials for a specified period.
Subdivision bonds – make guarantees to cities, counties or states that the principal will finance and construct certain improvements such as streets, sidewalks, curbs, gutters, sewers and drainage systems.
License and Permit bonds – are required by state law or local regulations in order to obtain a license or permit to engage in a particular business (contractors, motor vehicle dealers, securities dealers, employment agencies, health spas, liquor and sales tax).
Public Official bonds – guarantee the performance of duty by a public official, (treasurers, tax collectors, sheriffs, judges, court clerks and notaries).
At Rue Insurance, we have a dedicated bond department to handle all of your surety needs. Please contact our bond representatives at 800-272-4RUE and ask for our bond representative.
