Municipal Bonds, Maintenance Bonds, Service Bonds
Commercial surety bonds guarantee performance by the principal of the
obligation or undertaking described in the bond. Commercial surety bonds
include the following:
License and Permit Bonds
o Contractor License
o Highway and Street Permit
o Agent/Adjuster/Broker License
o Fuel Dealer
o Professional License
o Automobile Dealer
o Alcoholic Beverage Compliance Bonds
o Trustee Bonds
o Receiver or Trustee Bond in Bankruptcy
o Public Official
o Notary Public
o Deputy Sheriff
o County/City/School Treasurer Bonds
o Court Clerk
o Loan Closing Attorney
o FHA Schedule Bonds
o Court Bonds
o Plaintiff Replevin
o Plaintiff Attachment
o Cost Bonds
o Miscellaneous Bonds
Fidelity Bonds - ERISA (Pension Plans), Business Services Bonds
Financial Institution Bonds and D&O Coverage - Commercial Banks and Savings
How is Suretyship Similar to Other Forms of Insurance?
It’s important to recognize the similarities between suretyship and other
forms of insurance:
o State insurance commissioners regulate both suretyship and other
o They both provide a safety net for financial loss.
How is Suretyship Different?
Key differences exist between suretyship and other insurance:
o In traditional insurance, the risk is transferred to the insurance company.
However, in a suretyship, the risk remains with the principal and the
protection of the bond is designated for the obligee.
o In traditional insurance, the insurance company assumes that part of the
premium for the policy will be paid out in losses. Yet, in true suretyship,
the premiums paid are "service fees" charged for the use of the surety
company’s financial backing and guarantee.
o In underwriting traditional insurance products, the goal is to "spread the
risk,” while in a suretyship, surety professionals view their underwriting
as a form of credit. Therefore, the emphasis is on the pre-qualification and
The current federal law on federal public works is known as the Miller Act,
which requires performance and payment bonds for all public work contracts
in excess of $100,000 and payment protection, with payment bonds the
preferred method, for contracts in excess of $25,000. Almost all 50 states,
the District of Columbia, Puerto Rico and most local jurisdictions have
enacted similar legislation requiring surety bonds on public works as well.
By obtaining a surety bond, you can transfer the risks associated with
completion dates and quality concerns to a surety company. Contact our
expert team at 903.482.5255 today to obtain a surety bond and protect your