Surety Bonds are like people: They come in all shapes and sizes. The important thing to remember is, bonds are not insurance for YOU, they are designed to insure OTHER people that you are whom you say you are and that you will do what you say you will do.
ERISA Bond
Required to protect the participants and beneficiaries from dishonest acts of a fiduciary--person to whom property or power is entrusted for the benefit of another--who handles the plan assets. ERISA requires every plan to bond any fiduciary and all other persons who handle plan assets.
Fidelity Bond
A form of protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
Fiduciary Bond
Also known as a probate bond, a Fiduciary Bond is a judicial bond that guarantees that a court-appointed executor or guardian performs all duties. A fiduciary bond is required by the court in order to protect the person for whom the fiduciary is acting, such as a ward or invalid. A fiduciary’s responsibilities could range from managing an estate to giving financial advice.
License & Permit Bonds
Surety bonds which are typically required by Counties or Cities & Towns. These Bonds will enable you as a contractor to quickly pull a permit or multiple permits.
These Bonds are issued by our Agency , normally within minutes. A Surety Company underwrites the bonds and the cost rarely exceeds $ 100.00 per year.
What are they for ?
These Bonds will normally pay for the costs to correct work which has been improperly performed by a contractor, typically, as a result of an inspection by the county or Municipality where the Contractor fails to correct an error that has been brought to the Contractor's attention.The county will contact the Surety Company which writes the bond for the Contractor in question and then the surety company will pay the amount required to an outside contractor to bring the work up to the required specifications.If the bonded Contractor does not respond, the Bonding Company is then legally entitled to recoup the damages from the Contractor who purchased the bond in he first place. In this way it is a bond and not Insurance.
Performance Bond
A Bond which is typically required by a General Contractor or Company which needs a Job performed. The Performance Bond , which will be issued by a Surety or Insurance Company , will guarantee completion of the Contracted Job within a certain Time Limit by the Subcontractor who procures the Bond.
The Bond Limit is normally based upon the Contract amount of the Job. If the Job is abandoned or not completed within the prescribed amount of time, the Bonding Company will intervene, in some cases, and have another Subcontractor complete the Job.
The Bonding Company will then set about trying to collect , from the Bond Procuring Subcontractor, the amount of Money it has lost in order to complete the Job as per the original Contract.
A bid Bond is a pre-cursor to the original Performance Bond and will guarantee the Bid by the Subcontractor.
The underwriting requirements for these Bonds can be very strenuous if the cost of the Job exceeds $ 150,000. Good credit standing by the Owner of the Contracting Firm is a necessity along with acceptable Company Financial Reports.
These Bonds will take a minimum of 3 to 4 days to underwrite for a smaller Bond and 10- 20 days for a larger Bond. Some Companies simply may not qualify for a Bond. It is a good idea to check with an Agent before you accept a Job which steadfastly requires a Performance Bond.