Thursday, 25 November 2021

Acquiring a Surety Bond

Obtaining a surety bond online Florida typically involves some type of background check of the individual, the business, or even both. This often involves investigation of a credit report and the provision of company’s financial record. Both the bond amount and the premium will be set by the credit worthiness of the principal. The type of bond and nature of the business also may be key factors.

A surety bond online Florida premium typically compasses from 1 percent to 15 percent of the bond amount. Premiums are typically paid yearly. Some business bonds may be secured by the U.S. Small Business Administration, which will consequently need an additional fee, but may make it easier for the company to obtain a surety business bond. Some bonds are only required by contract, and others are required by law. Regardless of the nature of bond is needed, a surety bond is almost always obtained from a professional bonding organization. 

1. Contract Surety Bonds

A contractual bond serves as an inducement for the obligee to enter into a contract with the principal. Contract surety bonds are often used in the construction field, and come in respective variations. Major types of Contractual bonds:

  • Bid bonds guarantee that a constructor who sets up a bid will enter into a contract if the bid is accepted.
  • Performance bonds guarantee that the contractor will fulfill the provisions of the construction contract.
  • Payment bonds guarantee that the contractor will pay for subcontractors. Subcontractors also may be required to get bounded.
  • Supply bonds guarantee that the contractor will pay for the raw materials to the suppliers.
  • Maintenance bonds guarantee that the contractor will fulfill any requirements relating to repair and upkeep once the construction is established.

2. Judicial Surety Bonds

Judicial bonds are used to bound variety of situations involving court proceedings. These are also known as court bonds. In a criminal case, bail bonds are issued that secure the appearance of the defendant for trial or other future proceedings.

3. Probate Court Surety Bonds

A probate surety bond vouches that the trustee, guardian, or executor or administrator of an estate, will decently perform their fiduciary duty to the recipients. These are also known as fiduciary bond.

4. Commercial Surety Bonds

A commercial surety bond is a universal category for various bonds that do not fall under one of the other categories. Many a times, judicial and probate court bonds are enclosed in this category.

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