What is a surety bond?
A surety bond is a promise or guarantee backed by a surety company.
How is a surety bond different from an insurance policy?
Insurance is a two party contract between the insured and the insurer (insurance company). The point of this contract is a promise that the insured will be compensated by the insurance company if a covered loss occurs.
A surety bond is a three party contractual agreement between a Principal, Obligee and Surety.
- Principal is the individual or business that purchases the surety bond to guarantee their future work performance.
- Obligee is the entity that is requesting the surety bond; to reduce the likelihood of financial loss.
- The final party to the agreement is the Surety, which is the company that provides the financial guarantee if the principal fails to fulfill the set task.
A surety bond arrangement is a guarantee that if the obligation of the principal is not fulfilled, the obligee can recover its losses from the surety per the terms and conditions of the surety bond in place.
How do I secure a surety bond?
If an entity is requesting you to provide a surety bond, please contact an ALIGNED Insurance Advocate or connect with us at www.alignedinsuranceinc.com today.
More About ALIGNED Insurance
ALIGNED specializes in delivering insurance and risk management solutions exclusively to Canadian businesses. Through our 18 points of differentiation and expertise, we deliver unmatched value to our growing portfolio of clients from all industries that range from small to large organizations.
We offer all of the following products:
Board Insurance / Directors and Officers (D&O) Insurance
Employment Practices Liability (EPL) Insurance
Fiduciary Liability Insurance
Property Insurance- Including Business Interruption & Extra Expense
Machinery Breakdown/Boiler & Machinery Insurance
Course of Construction(COC)
Wrap-up Liability Insurance
Commercial General Liability / CGL Insurance
Pollution Liability Insurance
Commercial Automobile & Fleet Insurance
Umbrella Liability Insurance
Cyber, Hacking & Privacy Liability Insurance
Crime/Fidelity/Employee Theft Insurance
Professional Liability/Errors & Omissions (E&O) Insurance
Kidnap & Ransom Insurance
Representations & Warranty Insurance
Surety & Bonding