Surety Bonds

Being a business owner means you need to wear many hats. And on any given day, you may have several projects in various states of completion. These projects often involve third parties, making your level of oversight and autonomy more limited. Surety bond insurance provides a level of protection against a third party’s failure to deliver.

When you are dealing with investors and contractors on projects, you need assurance they will fulfill their obligations. And you want assurance that your investment has protection if they fail to do so. That is where a surety bond comes into play.

Surety bond insurance is not as well-known as home or auto coverage, but it is crucial. At Lake Region Insurance Agency, we have the industry know-how to get you the policy you need. No matter your industry, there is a surety bond that can work for you. Our job is to help make sure you have coverage in place for any eventuality.

What Is a Surety Bond?

A surety bond is a legal promise between three entities. A surety bond will involve the following players:

1. Principal – This is the person or business that buys the bond, and that must fulfill an obligation to the obligee. A construction contractor is a good example of a principal.
2. Obligee – This part of the surety triad is the entity that requires the bond to ensure the principal completes the work. The surety bond protects the obligee. This entity is often a large corporation or a government agency.
3. Surety – The third entity is the issuer of the bond. This is typically an insurance company. They pay the obligee if the principal doesn’t fulfill their contract.

Surety bonds help protect businesses, consumers, and government groups from financial risk. In the United States, there are hundreds of thousands of surety bonds. Lake Region Insurance Agency can help you make sense of all your options.

Different Types of Surety Bonds

The majority of surety bonds are for use in the construction industry. With so many players in motion on construction sites, the hiring company or agency wants to protect their investment against faulty or incomplete work. 

The most common surety bonds include:

• Performance Bond – This ensures that the principal fulfills its contract.
• Bid Bond – This ensures that the principal will not change its bid after the obligee accepts it.
• Payment Bond – This ensures that the principal pays all subcontractors and suppliers.
• Notary Bond – This bond protects people in the case of notary fraud or errors.

Protect Yourself with Lake Region Insurance Agency

Whether you know you need surety bonds or you have no idea what they are, our Lake Region team can help. We serve you, not the insurance companies. So no matter the need, from home to auto to commercial, we can find a policy that fits your situation.

Our team has the experience and expertise to guide you in your policy choices so that you have excellent coverage. Stop in or call one of our offices for an insurance review and free quote.