SURETY & FIDELITY BOND
Trusted Assurance for Reliable Performance and Peace of Mind
A Surety bond is a contract among three parties: the obligee – the party who is the recipient of an obligation. The principal- the primary party who will perform the contractual obligation. The surety- who assures the obligee that the principal can perform the task.
The 4 types of Surety Bonds:
BID BOND
Ensures the bidder on a contract will enter into the contract and furnish the required payment and performance bonds if awarded the contract.
PAYMENT BOND
Ensures suppliers and subcontractors are paid for work performed under the contract.
PERFORMANCE BOND
Ensures the contract will be completed in accordance with the terms and conditions of the contract.
ANCILLARY BOND
Ensures requirements integral to the contract, but not directly performance related, are performed.
When is a Surety Bond necessary?
Any Federal construction contract valued at $150,000 or more requires a bond when bidding or as a condition of contract award. Private entities, service contracts and supply contracts may also require surety bonds.
The 3 types of Fidelity Bonds:
ERISA BONDS
Protection for businesses with a defined benefit plan
BUSINESS SERVICE BONDS
Protection for businesses whose employees enter clients homes
DISHONESTY BONDS
Blanket or scheduled coverage to protect businesses against employee misconduct.
When is a Fidelity Bond necessary?
Your business may be required by law to have a fidelity bond if you have a defined benefit plan. Any business with employees, contractors or those with a high turnover rate.