SURETY BONDS
The Misunderstood Value
Of Surety Bonds
W
hen it comes to
construction and
contractor portfolios,
the ability to provide
Surety Bonds is one of
the more complicated and crucial services a
broker can offer. Unlike insurance products
— which are relatively easy for individuals
to understand — Surety Bonds are often
misunderstood. The core function of a
Surety Bond is not misunderstood, but
their value and timely delivery can often
be overlooked which can result in a failed
bid that potentially leads to lost contracts.
The importance of having an experienced
Surety Broker working for you is absolutely
critical in winning future projects.
So what, exactly, are Surety Bonds?
Although there are numerous types of
Bonds available on the insurance market,
by far the most widely used are Contract
Surety Bonds. In a nutshell, they are a
guarantee by the Surety Company that
the contractor will satisfy its obligations
with respect to the contract it successfully
bid on. Surety Bonds are provided at
the tender phase, when companies are
bidding on contracts to owners — often
municipalities, cities, and private entities.
At this phase, th