Not Sure Why You Need A Surety Bond? 3 Situations In Which One May Be Required

If you're looking for a surety bond, and you're not sure what they are, you're not alone. Most people aren't aware of what surety bonds are. In simple terms, surety bonds are a way of guaranteeing that you'll pay for the services you're rendering, or protecting them against liability should something go wrong along the way. It's important to know that are are many different types of surety bonds, with each one providing protection for a specific thing. If you're not sure what type of surety bond you need, here are the most common reasons why you'll need one, which will help you know which kind of surety bond to choose.

You're Trying to Get Licensed

If you're trying to get licensed, you may need to show proof that you've received a surety bond before you will be provided the license. The bonds will prove that you're protected against losses and that you'll provide the services you've agreed to provide. Some of the most common forms of surety bonds you'll need for licensing include motor vehicle dealer bonds, mortgage bonds, and private investigator bonds. If you're attempting to get licensed to conduct business in any of those areas, you'll need to obtain the proper bond before you can get fully licensed.

You're Involved in a Construction Project

If you've recently become a licensed contractor, you'll need to obtain surety bonds before you can begin certain construction projects. There are three basic types of construction bonds, and you may be required to obtain all of them at some point in your construction career. Those bonds include payment bonds, bid bonds, and performance bonds. Payment bonds guarantee that you'll pay for the services rendered, including payments to your subcontractors and to your suppliers. Bid bonds guarantee that you'll fulfill the requirements set forth in the contract once you secure the bid. Performance bonds guarantee that the work you perform will be professional and without substantial flaws.

You're Taking Someone to Court

If you're going to be taking someone to court, and you're hoping to seize property in an attempt to satisfy a judgment, you may be required to obtain a sheriff's indemnity bond. This type of bond is designed to protect law enforcement officials from liability associated with the seizure of property. Basically, that means if the person you obtain a judgment against tries to sue law enforcement officials for seizing their property, your sheriff's indemnity clause will provide protection against the lawsuit. Many law enforcement offices will require that protection before they'll assist you in the seizure of property to satisfy your judgment in a civil case.

For more information, talk to a company such as Service Insurance Company.

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