Surety Bond
Surety bonds play a crucial role in various industries, providing assurance and financial protection for businesses and individuals. At Lakenan, we understand the importance of surety in mitigating risks and building trust.
Our knowledgeable team specializes in surety solutions, offering comprehensive coverage tailored to the unique needs of our clients.
Lakenan has fostered strong relationships with leading surety companies, enabling us to provide a wide range of bond options to suit different requirements. Our hands-on approach starts with a thorough evaluation of your specific needs and risk exposures. This assessment allows us to design personalized surety solutions that align with your business objectives and provide the necessary financial guarantees.
We offer surety bond coverage in several key areas:
- Contract Bonds: These bonds guarantee the performance of specific contracts and include various types such as:
- Performance Bonds: Assure that the contractor will fulfill the terms of the contract and complete the project to the satisfaction of the obligee.
- Bid Bonds: Provide financial assurance that the contractor has the capacity to undertake the project at the bid price if awarded the contract.
- Supply Bonds: Guarantee the timely delivery of goods or materials as specified in the contract.
- Maintenance Bonds: Ensure that the contractor will rectify any defects in workmanship or materials during the maintenance period.
- Subdivision Bonds: Secure the completion of infrastructure projects, such as roads or utilities, within a subdivision development.
- Commercial Bonds: These bonds encompass a variety of non-contractual obligations in the business realm, including license and permit bonds, public official bonds, and more. They ensure compliance with regulatory requirements and protect against potential financial losses.
- Court Bonds: Court bonds are required in legal proceedings to ensure financial protection against potential losses resulting from legal actions, including appeal bonds, fiduciary bonds, and probate bonds.
- Fidelity Bonds: Fidelity bonds provide coverage against employee dishonesty and protect businesses against financial losses resulting from fraudulent acts committed by employees.
Common Surety Bond Questions
What’s a Surety Bond?
Surety bonds fall under the umbrella of consumer protection. They function like an insurance policy.
If you make a contract with a client, a surety bond functions as a guarantee that you will do the work accordingly. If you fail to follow or complete a contract, the client can file a claim against the bond. Therefore, they’ll be able to recoup some of the money lost by the failure of the project.
How do bonds differ from insurance?
Yes, bonds provide a financial settlement for your clients. Still, they are not the same as insurance.
With insurance, the insurance company pays a settlement on your behalf. Under a bond, however, you must pay the settlement to the affected customer. Therefore, the bond functions like a guarantee that you will cover the customer’s losses in case of a problem on your end. It tells your clients that you have the financial backing behind you to do their work appropriately.
Who are the parties of a Surety Bond?
Surety bonds involve three parties:
- The Principal: The person, company or entity carrying the bond. If you are the contractor, you’ll have a bond in your name.
- The Obligee: This is the individual who benefits from a bond. It’s usually the party who you work with under a contract. They will be the one to make a claim on a bond if necessary.
- The Surety: The company that issues and maintains the bond. The principal pays the surety a premium to maintain the bond. In some cases, the bonding company will pay a settlement to the obligee initially. The principal must still compensate the bond company, however.
How much bonding do you need?
Countless standards go into determining how much money principals need to carry on bonds. For example, industry standards and a company’s net worth often play a role.
However, one of the best places to look is within a contract itself. Many obligees will require the principal to carry certain bonds. Indeed, they might only award a contract after the principal enrolls in the bond. Work closely with your obligee to make sure you have bonds according to stipulations.
Bonding can help you win contracts and better serve your customers. Let us help you determine the appropriate amount of coverage for your needs.
How do bonds differ from insurance?
Yes, bonds provide a financial settlement for your clients. Still, they are not the same as insurance.
With insurance, the insurance company pays a settlement on your behalf. Under a bond, however, you must pay the settlement to the affected customer. Therefore, the bond functions like a guarantee that you will cover the customer’s losses in case of a problem on your end. It tells your clients that you have the financial backing behind you to do their work appropriately.
How do bonds differ from insurance?
Yes, bonds provide a financial settlement for your clients. Still, they are not the same as insurance.
With insurance, the insurance company pays a settlement on your behalf. Under a bond, however, you must pay the settlement to the affected customer. Therefore, the bond functions like a guarantee that you will cover the customer’s losses in case of a problem on your end. It tells your clients that you have the financial backing behind you to do their work appropriately.
How do bonds differ from insurance?
Yes, bonds provide a financial settlement for your clients. Still, they are not the same as insurance.
With insurance, the insurance company pays a settlement on your behalf. Under a bond, however, you must pay the settlement to the affected customer. Therefore, the bond functions like a guarantee that you will cover the customer’s losses in case of a problem on your end. It tells your clients that you have the financial backing behind you to do their work appropriately.
At Lakenan, our commitment extends beyond providing surety bond coverage. We offer a range of services to support you throughout the process, including our expert guidance, efficient processing and claims assistance.
With Lakenan, you can trust that your surety needs are handled with professionalism, expertise, and dedication. We are committed to providing the tools and protection necessary to help you meet your contractual obligations and build trust in your business relationships.