What Exactly is a Bond?
In the financial world, a bond is a type of debt usually issued by a governmental entity or a corporation to provide money for a road, building, or other capital need.
But we’re referring to bonds in the insurance world. A bond in this case functions as a third-party guarantee that whoever purchases the bond will perform a certain task, usually for their client.
In the insurance world, you will typically see the following types of bonds:
Surety Bond
A surety bond is a contract between three parties. The person who is the recipient of an obligation, the primary party who will perform the contractual obligation, and the person who assures the obligation will be done.
Lost Title Bond
These bonds are a type of surety bond. They provide proof and guarantee of ownership to the Department of Motor Vehicles. When no other form of documentation is available a lost title bond shows the DMV that you are the “owner” of said vehicle.
Contract Surety Bond
Contractor bonds are one of the most common types of bonds you will see in the insurance space. Contract bonds are used in the construction industry by general contractors and subcontractors. They are a guarantee to a project’s owner that the contractor will perform all work in a manner that adheres to the contract put in place.
License and Permit Bonds
These types of bonds function as a guarantee to a government entity that a company will comply with a statute, state law, ordinance, etc.
Some examples are, but not limited to:
- Contractors License Bonds
- Tax Bond
- Environmental Bonds
- Broker’s Bonds
- Motor Vehicle Dealer Bonds
- ERISA Bonds
Our job as an independent agency is to help you navigate a cumbersome system in finding the best fit for your bond requirements.
We can help you find the bonds appropriate to your needs, provide you with your bonds, and help you get it to the party requesting it.
Call our office today or complete the form below to get started!