What Is a Surety Bond?

Get a Quote

What Is a Surety Bond?

Surety bonds are financial guarantees put in place to ensure that obligations are fulfilled to the agreed upon terms. This can include a contract being completed to a certain time frame or standard of quality. If these obligations are not met then a surety bond ensures that there are funds in place to help complete the contract. 

Surety bonds are used throughout many industries, but are most frequently used within the construction industry. 

Who Is Involved?

A surety bond is a triparty agreement involving the following parties:

1. The Principal

The person or entity completing the contract. The principal must meet the terms of the contract.

2. The Obligee

The person or entity who is guaranteeing themself that the principal will meet the obligations of the contract.

3. The Surety / Obligor

The entity providing the financial guarantee to the obligee that the principal will fulfill their obligations.

Types of Surety Bonds

Although there are standard types of surety bonds to suit a range of industries, each of our bonds is assessed bespokely to make sure that it suits all of your needs. 

The types of bonds we can offer:

 

Advance Payment Guarantee Duty Deferment Reinstatement Bonds
Bailiff Bond Landfill Bonds Remediation Bond
Completion Guarantee Materials Supply Rent Deposit Guarantee
Construction Guarantee Payment Bond Rent Guarantee
Contract Guarantee Payment Guarantee Restoration Guarantee
Deferred Payment Guarantee Pension Bond Retention Bonds
Deposit Protection Performance Bond Road Bonds
Development Bond Purchase Guarantee Sewer / Water Bond
Warranty Bond

When Do I Need a Surety Bond?

The simple answer to this is that a surety bond may be required by the obligee as a condition of a contract with the principal. They help to bring another level of protection for those who may be affected by the contract.

For example, a local council will require a bond for a road project to make sure that the public are protected and have quality roads to use. The surety is vouching that the terms of the contract will be fufilled, and if they are not then a claim can be made against the bond to help make sure the requirments are met.

How Long Does a Surety Bond Last For?

Every bond has an expiry date and the length of a surety bond will depend on the duration of the obligations which are being guaranteed.  This is known as the surety bond term. However, once this expiration is reached a surety bond can be renewed or extended for example if a project overruns. This is not always the case and will depend on the type of bond and the terms attached to it. If the bond is to be renewed or extended then the risks will have to be assessed again.

Application Process

We keep our bond application as simple as possible. However there is certain information you will need to provide in order to help us assess your bond requirement. 

1) We will ask you to fill out 3 forms to provide the full details of the project and your company history. There is one for your general company information, an application for the details of the contact and one for your bank information.

2) We will speak to our panel of insurers to get you the best price and cover possible.

3) Our team will present to you your options and get you the right cover in place.

If you would like more information then please contact bonds@alternativeinsurancebrokers.co.uk and our team will get back to you shortly.

Get a Quote

To get a quote for your surety bond there are many factors that we need to access. The forms below will help you to provide all these details, such as your company financial information and history and the details of the project. 

Please download and complete all the forms below and send them to bonds@alternativeinsurancebrokers.co.uk.

General Information Form

Application Form

Bank Information Form

If you have any questions that you would like answered before proceeding with a quote then please contact our team using the form below and they will get back to you shortly.

Recent Articles

Unoccupied Property Insurance Guide

What is Unoccupied Property Insurance? Unoccupied Property Insurance is a specialised home insurance policy that focuses on unoccupied buildings. Our policies cover properties that will be empty for 30 days or more. Empty properties have particular requirements, which...

Surety Bonds Guide

What is a Surety Bond? A Surety Bond is a form of guarantee. They make a guarantee between three parties. These are: The Obligee, The Principal and The Surety. The Obligee is the person who will be paid if there is a default. The Principal is the person who takes out...

What is the Secret to Car Insurance Grouping?

It comes round every year. That time of year, where you have to renew your car insurance. How much will it be this year? Sometimes it can hard to guess. After all, what might have been a great price last year can seem like a distant memory when your renewal comes in....

Why do so many people wait until the last minute to find car insurance quotes?

When do you look for car insurance prices? Do you spend the months leading up to your renewal searching out the best deals? Like many people, you might wait a little longer before you start to look for prices. In fact, many people wait until the last week before their...

How much will Storm Ciara cost the Insurance Industry?

Every year, it seems as if a new storm front (often with a comical name) batters the UK, causing worse and worse damage to property and infrastructure. With the worsening of the climate crisis, these storms are predicted to become more frequent and dangerous. It has...

How Can We Help?