Does Buying a Surety Bond Really Matter for Your Business?
Although surety bonds are becoming more common in society, many people are not familiar with them. Yet, surety bonds are an important safeguard and/or necessity for many business owners, companies, federal and state government agencies. Bonds can play a very crucial role in business. They can protect a business and create trust when dealing with prospective clients. Bonds are a legal requirement by states for various industries. What is a surety bond? A surety bond is an agreement between three parties: the principal, surety and obligee. The surety provides a financial guarantee to the obligee (i.e. a government agency) that the principal (business owner) will fulfill any contractual obligations. The purpose of a surety bond is to guarantee a principal’s integrity, performance and financial responsibility. The main purpose of a surety bond is to make sure that the obligee will perform their contractual obligations. It also guarantees compliance with a law or contract For instance, a small contractor renovating a living room, does not finish the job according to the contract. Or maybe they fail to abide by the state laws and regulations. In both cases, they can have a claim filed against them by the consumer, asking or demanding...
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