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How do I know what type of bond I need?
Because there are tens of thousands of surety bond variables, it can be very confusing learning about surety bonds and figuring out exactly what the risk and obligation might be. Having a surety professional is extremely important to best protect yourself and your company.
Not having your surety relationships stable and appropriate can be devastating to a business that is caught off guard when terms change dramatically. We offer business owners and agencies the confidence to know we have the expertise to manage all risks.
However, finding out what type of bond you need is an easier process than you might think. There are basically 4 different classifications of surety bonds and as long as you can figure out which class you fit in, the rest is easy.
The four basic bond classifications are:
- General Business Bonds
- Contract Bonds
- Court Bonds
- Fidelity Bonds (not a surety bond but often referred to as a bond and is underwritten by the surety side of an insurance company)
The two most common bonds in the surety industry are commercial and contract bonds. Watch this short video to learn about the differences in these commercial and contract bonds.
Let’s ask ourselves 3 simple questions so we can figure out what class you fit in.
- Who is requiring the bond?
- What kind of business am I?
- Is there a contract involved?
Just by answering these questions you can easily figure out where you fit and what the process will be. However, there are times when the risk is not so cut and dry and SPS is here to walk you through the process from the very beginning to get you moving in the right direction rather than wasting valuable time.