Surety Bonds

If you do business in an industry where you are required to sign a contract and then meet the demands of that contract for your customer or client, surety bonds may be something you need to consider. With a surety bond in place, the party that you are serving will have protection, and that protection might give them the peace of mind needed to agree to work with you on the project. 

While they are an important tool in the management of many types of projects, surety bonds can be a little confusing. Count on the agents at ISU Armac to explain the details to you in plain English so you can select the right product and get the coverage that is required for the job.

Understanding Surety Bonds

If you don’t quite understand how surety bonds work or what they are used for, we hope to provide some clarity in this section. Of course, if you would rather, you can just reach out to us directly and we’ll explain everything in detail so you can get your mind around it and make a good decision. 

Surety bonds are essentially agreements that involve three parties. There is the party acquiring the bond, known as the principal, who will be doing the work or providing a service of some kind. Next is the party that is requiring the bond to be taken out, which is known as the obligee in technical terms. This party is requiring that the bond is presented as a condition of the project. Finally, there is the surety, which is the insurance company standing between these two parties and making sure everything is completed as it should be. 

All three of these parties are necessary for the surety bond system to come together. Most likely, if you are in need of a surety bond, you already know who the obligee will be, and you simply need an insurer to take on the bond and make everything official. By working with ISU Armac, we’ll make it easy to find that insurer and we’ll guide you through the process from start to finish. 

A Few Different Types of Surety Bonds 

With the help of ISU Armac, you can take out a diverse selection of surety bonds. The purpose of each of these bonds is unique to what it has been designed to do, so it’s critical that you find the right one to use in the right situation. We’ll be happy to help you with that task, but the list below will give you a starting point of understanding. 

• Bid bonds. This is a common type of surety bond that is designed to give the owners of a project confidence that a selected contractor will follow through on their bid if selected for the work. So, when you submit a bid as a contractor, you might be required to include a bid bond as part of the process, as a guarantee that you stand behind your offer and are ready to deliver. 
• Performance bonds. With this surety bond, the project owner gains protection by the assurance that the contractor is going to get the job done according to the terms of the agreement. If that doesn’t happen, the insurer will come in and handle the financial losses that were incurred along the way. 
• Payment bonds. During big projects, there are often many different parties who need to be paid, including subcontractors and suppliers. With a payment bond, the payment to those parties is guaranteed, and again, the insurance company will be responsible for making sure they are paid if the original contractor falls short in some way. 
• License and permit bonds. One of the most common types of surety bonds is license and permit bonds, which many government agencies require before a contractor can work on a project. Not only do these bonds require that the work is done correctly and completely, but also that it conforms with all of the relevant rules for the project. 

Customized Solutions for Your Business

The nature of surety bonds is such that each situation is different. The right surety solution for one business, or one project, won’t apply to the next. Through our extensive experience in the insurance industry, we can help you find the right solution for your needs, while controlling costs effectively at the same time. We are comfortable working with businesses large and small, so don’t hesitate to reach out to us right away for assistance. If you have struggled with surety bond issues in the past, you can put those worries behind you and finally get the service you deserve. 

Expertise and Reliability

With something as important as surety bonds, you don’t want to be working with an agency that is just getting started in this business. Getting your bonds right is too important to trust to a new team, so stick with the proven track record of ISU Armac to make sure you are in good hands. 

Whether required under the terms of a contract agreement or just as an added piece of mind for a potential client, securing a surety bond is a great way to protect everyone involved in a project. If you need to take out a surety bond for an upcoming job, or if you just have questions about what that would look like and how you would get started, our agents are standing by to help. Give us a call today to learn more!