Suretyship is a specialized guarantee provided by surety or insurance companies that is created whenever one party guarantees the performance of an obligation by another party. Generally, there are three parties to the agreement.
Because they defy classification and are unique in purpose, many bonds fall under the general description of Commercial or Miscellaneous Bonds. These Bond Types cover a broad range of industries and obligations. They may cover obligations under a license; an obligation to perform certain duties; an obligation to remit monies; an obligation to pay certain taxes, etc. The ProSure Group handles all kinds of these bond types.
Contract Bonds
Entities (Contractors) that enter into a contract with a public or private owner are many times required to provide these types of bonds. Bid Bonds accompany their bid or proposal, while Payment and Performance (P&P/Final) Bonds are provided once the contractor is awarded the project. Though public owners are mandated by law to require these bonds of their contractors on projects of certain types over certain dollar amounts, General Contractors commonly require their subcontractors to provide them with P&P bonds to help manage risk. Additionally, lending institutions manage risk by commonly making the securing of P&P bonds by the contractor a condition to the approval of loans that are issued for commercial type construction.
Subdivision Bonds
Subdivision bonds are different from the more common Contract/Performance and Payment Bonds in that, the owner of the project provides bonds to the public entity to guarantee the completion of improvements that will paid for by the owner/developer yet ultimately be dedicated to the public entity.
Supply Bonds
A bond between a supplier and purchaser which guarantees the supplier will furnish supplies or materials as contracted. Should the supplier default, the surety will indemnify the purchaser of the supplies against any loss sustained as a result.
Courts often require bonds for fiduciary responsibilities and prior judicial actions.
Fiduciary and Judicial Bond Description
Fiduciary Bonds ensure performance of someone acting on another’s behalf. Judicial Bonds ensure that both defendant and plaintiff in a legal proceeding have enough money to pay the other party, should the case be decided against them.
Most Common Fiduciary Bonds:
- Administrators
- Executors and Administrators
- Guardians, Executors, Conservators, Trustees, Committees
Most Common Judicial Bonds-Defendants & Plaintiff Bonds for:
The ProSure Group, Inc.,