Not every business owner is going to need surety bonds to continue their daily operations. However, when you do, it is important to obtain them from a reputable company. Issued by insurance companies, surety bonds are third-party contractual obligations. They represent obligations between the obligee, the principal, and the surety. The bond specifically guarantees that monetary damages are provided to the obligee by the issuer of the bond should the principal fail to perform the terms of the contractual agreement.
As a business owner, the time might arise when you need to obtain a surety bond that assists you in guaranteeing payment for utility bills or state sales tax. If you are an attorney, one of your clients might need to post a court bond. This often occurs when settling an estate and assets need distribution among a variety of heirs. In many states, notary publics must post bonds during the normal course of their work. Contractors typically have to post a permit or license bond to ensure that they are following local ordinances.
Since the types of surety bonds vary so widely, the cost to obtain them does as well. The following list indicates the main types of surety bonds that are commonly obtained.