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BenefitSource Insurance Services, Inc.

28 Argonaut, Suite 100
Aliso Viejo, CA 85254

Surety Bonds

A surety bond is similar to an insurance policy in that it provides a level of security and protection to your business.

A surety bond is a contract between three parties:

  • The obligee - recipient of an obligation
  • The principal - performer of the obligation
  • The surety - company that assures the principal will perform the obligation for the obligee

This three-party instrument binds one party to comply with the terms and conditions of an agreed-upon contract. If the party is unable to successfully perform the contract, the surety assumes the party’s responsibilities and ensures that the project is completed. Such bonds enable businesses to secure specific jobs and afford them much-needed protection.

Here at BenefitSource, we can help you identify the investment that is right for you. A BenefitSource Investment Specialist can help you understand how it all works and form an investment plan that is tailored to your goals. Below you will find a brief summary of some of the most common bonds we offer at BenefitSource.

Understanding the Four Most Common Types of Surety Bonds:

  • Contract Surety - Bonds that the government or an owner of a construction project may require a contractor to obtain. Versions of this may include:
  • Bid bond – Affords protection to a project owner (obligee) in the event a successful bidder will not enter a contract or fails to provide the required surety bonds or other security.
  • Performance bond – Provides protection to the obligee if the contractor defaults on its obligations under the bonded contract.
  • Payment bond – Guarantees that the contractor will pay subcontractor, labor, and material bills associated with a construction project.
  • Special Risk - Coverage that is used in the securities industry, including coverage for lost, stolen, or destroyed financial instruments such as stocks, bonds, or other marketable securities.
  • Commercial Surety - Bonds required of individuals or businesses by the government, legislation, or by other entities including alcohol tax bonds, lottery bonds, sales tax bonds, and utility bonds.
  • Judicial bonds, required of either a plaintiff or defendant in judicial proceedings, to reserve the rights of the opposing litigant or other interested parties.
  • Fiduciary bonds required for those who administer a trust under court supervision.
  • Public official bonds required by statute for certain holders of public office, to protect the public from malfeasance by an official, or from an official's failure to faithfully perform duties.

Ask Your Investment Professional

Be Insurance minded. Contact BenefitSource today to learn more about the bonds that are right for your business.

To get started Email Us today or call us at (877) 215-5431.

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