A surety bond is a guarantee purchased by a principal, who is guaranteeing that future work will be performed. The most common surety bonds are in the construction industry when working on publicly funded projects, but other businesses use surety bonds in New York to protect their clients against employee theft. Some types of licenses, like auctioneers and auto dealers, require surety bonds before the government will provide a license.
When purchasing a surety bond, there are three parties that come together to create the contract. The principal, which can be an individual or business, is required to purchase the bond. The obligee is the entity that is requiring the purchase. Typically, the obligee is a government agency. The third entity in the triangle is the surety, or the insurance company that backs the bond. If the principal fails to complete the task, the surety makes reparations to the obligee. If the reparations exceed the bond amount, the principal will be required to make up the difference.
If you have to meet construction or installation deadlines or you’re working on a public project that requires surety bonds in New York, work with a specialist who understands the industry and can find the right product to meet your needs. Protect your assets and that of the community in which you work with a surety bond that guarantees you will meet your obligations.