Bonds, What are they?

What exactly is a Bond?

Bonds are technically NOT insurance, they are a guarantee that you , “The Principal” will fulfill an obligation to another person know in surety terms as “The Obligee”. The one who “BACKS” the Principals is the SURETY .

This obligation can be fulfilling a contract to all specifications, paying your suppliers, or laborers , paying your taxes or fees or even cleaning up public streets after a parade. The biggest thing that makes Bonds (or Surety) NOT INSURANCE  is that Bonds and Bonding companies have the right of “RECOURSE”, that is should you default the bonding company can AND WILL take your assets immediately to cover their payments to the injured party.

Insurance on the other hand pays an insured without recourse, in other words if you are in a horrible car accident and the company pays the injured party $300,000, they will not be knocking at your doors wanting the money.

With that being said what do you need to know about applying for a bond, first they will look at your CAPITAL , do you have the money and or assets to cover a potential loss should you default to the principal? Second, your CHARACTER , here you must understand the Bonding company WILL run a “Credit and Criminal” check on all potential clients. Lastly CAPABILITY, you must demonstrate you can do the task they are going to guarantee you can do.

NuSurance writes all types of bonds EXCEPT BAIL BONDS in every state we are licensed. Click here to get a quote for your bond.