Surety Bonds – North & South Carolina
Serving Charlotte, Concord and Huntersville, Mint Hill Matthews, Fort Mill, SC, and the surrounding communities.
A surety bond is used to guarantee a variety of agreements. It involves three parties: a principal (usually a company owner), a surety, which holds the entity responsible for the debt in the event that the business owner defaults, and the obligee who receives the guarantee that the principal will fulfill any obligations. Private entities may also be obligees, but contract bonds are frequently required by law. Therefore, government entities are usually bond obligees. You can also use surety bonds to meet various legal and statutory requirements. Businesses can use bonding to win contracts and abide by legal requirements. It also provides reassurance for their customers.
Legion Agency commercial agents can help you determine which type of bond is best for your situation. Get in touch with our agency today for help!
- The principal is the person or company that holds the bond. You would buy a bond in the name of a contractor.
- The Surety issues and maintains the bond. They are paid by the principal to keep the bond.
- The Obligee refers to the person or entity that benefits from the guarantee. If obligations are not fulfilled, they will be the party who can claim on a bond.
Bonds provide a financial settlement to obligees but they are not insurance. Insurance pays a settlement for you. You must pay the settlement to the customer affected by a bond. The bond acts as a guarantee that you will pay the customer’s damages in the event of an unexpected problem. This bond shows your clients that you have financial backing to complete their work properly.
- Fidelity Bonds
- Public Official Bonds
- Judicial Bonds
- Fiduciary bonds
- License and Permit Bonds
- Contract Bonds (Bid & Performance Bonds).
- Federal and Miscellaneous Bonds
- Notary Bonds
There are many factors that affect the amount of money principals must have to hold bonds. Industry standards and the company’s net-worth often play a part in determining how much money principals need to carry on bonds. A legal contract is the best place to find any specific bond amount. Many obligees will require that the principal carry certain bonds.