There are three parties to a surety bond

Surety bond companies in Florida are one of the three parties involved in the process; the other two are the principal who is the party providing goods or services and the obligee who is the party which has ordered the goods and services. Under ideal circumstances the obligee get exactly what he wants per the order specifications in terms of completion and compliance. In the event this does not happen, the surety company steps in to see that the contract is completed.

Surety bond companies in Florida provides a service which is beneficial to both the obligee and the principal. From the principal’s point of view, the low cost of the bond is its primary benefit. If it was not for a performance bond, it would be necessary for the contractor to use company funds, pledging them as security to open a letter of credit which guaranteed contract performance. This would tie up a lot of money or a considerable period of time, putting serious financial stress on the principal. This money would have to stay tied up well after the project was said to be completed as claims for poor workmanship and performance usually are valid up to a year after handover. To get the surety bond companies in Florida , the principal has to provide the surety company with credit standings and perhaps three years of audited financial statements. As the surety bond is basically a short term loan at a very reasonable rate, the surety wants to make sure the principal is in good standing financially and otherwise.

As the obligee, if the principal does not perform as agreed upon, a claim is placed against the surety. The surety will investigate the claim and if it is justified, the surety will pay per the terms of the bond. A surety bond is not a device which has the intent of making anyone rich, it is there to see that the job is completed.

Without surety bond companies in Florida it would not be possible to guarantee contract performance, however it must be stated that contract bonds are but one of the dozens of bonds that are available. There are licensing bonds that must be taken by certain classes of business, fiduciary bonds to protect from employee theft and bail bonds as well as many more.

If you are looking for surety bond companies in Florida may we suggest you contact. Buy Surety has relationships with many of the leading surety insurance companies and can provide a quick quotation for your specific needs.

Be the first to like.

Be Sociable, Share!
    Shares
    Share This