About Surety Bond Companies
Surety companies play an important role in commerce by providing assurance, in the form of a "bond," that an individual or company will perform contractual or legal obligations in an appropriate manner.
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History
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The first surety company was started in the United States in the 1880s and the industry is now worth nearly $4 billion in annual business. Surety companies write bonds in a variety of situations that can be roughly divided into three broad categories: commercial, construction and court.
Commercial Bonds
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A surety bond is often required as a prerequisite for engaging in commercial activity, typically in situations in which a license is needed. Such situations can include acting as a notary, insurance broker, mortgage broker, or freight broker.
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Construction Bonds
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Government agencies almost always require surety bonds on construction projects as a way of protecting taxpayer dollars. The surety's bond acts as an assurance that the project will be completed as promised.
Court Bonds
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Probate court proceedings frequently require the posting of a bond to protect against acts of dishonesty in a fiduciary relationship, such as with an executor of an estate or guardianship.
Bond Qualifications
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If you need to obtain a surety bond, you must demonstrate to the surety company that your financial affairs are in order and your character and reputation in the community is good.
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References
- Photo Credit Image by Flickr.com, courtesy of Jakob Montrasio
