Surety bond Definition
A surety bond is a form of insurance, but it is more of an reverse insurance policy. If any claim occurs the principal will have to pay the surety bonding company back. There are no deductibles for Surety bonds unlike traditional insurance. If you are applying for a license bond the state or federal government has set the bond amount. A surety bond has three parts, Principal, obligee and the surety company. The obligee decides the bond form language derived from state or federal statutes. For the most current and accurate bond form always consult with the obligee that is requesting the bond.
Surety Bond Underwriting
Surety bonds are underwriting differently than insurance policies. The underwriting of bonds is similar to underwriting loans. The surety will review your financial stability to determine if and how much surety credit they will extend.
Surety bond cost
The cost of the surety bond depends on the amount of the bond, the financial stability of the applicant and the type of bond needed. Depending on what surety bonding company is willing to write your bond come into play as well since each surety has their own filed rates.
What is a GIA?
A GIA stands for General Indemnity agreement this form is usually produced when the surety approvals you bond. The surety will retain the original signed GIA with all owners as well as spouses signatures. The GIA is the contract between you and your business stating that you will hold the surety harmless if a claim occurs. In the GIA it also stipulates that your will pay back the surety for fees and other costs associated with your bond.
What is a bond form?
A bond form is what the bond will be issued on. You can obtain your copy of your bond form needed from the obligee. Normally when you apply for your license a copy of the form is included in your licensing packet.
How long does it take to get approved?
For normal license bonds underwriting
can take up to 24 to 48 hours but for contract surety bonds it may take 5 to 10 business days.
Surety bond Markets
We have several different carriers located throughout the United States. With several different surety bond programs able to assits you with your bonding needs even if you have less than perfect credit. We are willing to write smaill $1,000 bonds as well as large bonds too. No matter what the bond type is we are willing to evaluate the risk at hand.
You can learn more about bonding by visiting our surety bond blog. Find out the in’s and out’s of the surety bond business. Keep up to date with current surety bond news and find out new bond requirements.
This is not legal advice but for information purposes only