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Surety Bonds provided by Altima Insurance Agency

To run your business, you need guarantees for contracts and other financial obligations. A surety bond is a promise to be liable for the debt, default, or failure of another. It is a three-party contract by which one party (the surety) guarantees the performance or obligations of a second party (the principal) to a third party (the obligee).
Type of Surety Bonds

The surety bond provides a guarantee to the obligee that the principal will conduct themselves per the terms outlined in the surety bond.

Surety bonds are legally binding contracts that ensure obligations will be met between three parties:

  1. The principal: whoever needs the bond
  2. The obligee: the one requiring the bond
  3. The surety: the insurance company guaranteeing the principal can fulfill the obligation

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Functions of Bonds

Functions performed by Contract Surety Bonds

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  • Guarantee that the bonded project will be completed according to the terms of the contract and at the determined contract price;
  • Guarantee that the laborers, suppliers, and subcontractors will be paid even if the contractor defaults and can result in lower prices and expedited deliveries;
  • Smooth the transition from construction to permanent financing by eliminating liens;
  • Reduce the possibility of a contractor diverting funds from the project;
  • Provide an intermediary - the surety - to whom the owner can air complaints and grievances;
  • Lower the cost of construction in some cases by facilitating the use of competitive bids.

Type of Surety Bonds

There are two main categories of surety bond: Contract Bonds and Commercial Bonds. Contract bonds guarantee a specific contract. Examples include Performance Bonds, Bid Bonds, Supply bonds, Maintenance Bonds and Subdivision Bonds. Commercial Bonds guarantee per the terms of the bond form.

When Do You Need a Surety Bond?

Surety bonds are typically required for contractors who seek to work on government contracts. They are also required for persons and companies that are licensed by a governmental entity. Even when not compulsory, surety bonds make sense when a contract requires performance, because they help compensate obligees when principals fail to meet their contractual obligations. They do not make sense if the amount of possible damages is negligible.

Talk to us to know more.

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As an independent agency, Altima Insurance Agency
Helps you find the right Surety Bonds Coverage
Contact Us
Arlington, Texas
814 W. Arkansas Ln. Arlington, TX 76013
We extend coverage to individuals and businesses in Fort Worth, Dallas, Duncanville, Arlington, Garland, Irving, River Oaks and Haltom City
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Failure to complete a project Coverage

Risk Factors
A contractor might start a project but fail to complete it due to some reasons.
Solution
Surety bonds can be taken to guarantee that an insurance company will reimburse your client when your business fails to complete a project or fulfil a contract.

Note:  Please talk to your financial consultant to check all the facts before proceeding

License / permit requirements Coverage

Risk Factors
You may need a valid license or permit to apply for a particular project which can only be taken you get your license.
Solution
If you have surety bonds, you can get your license / permit on its security.

Note:  Please talk to your financial consultant to check all the facts before proceeding

Failure to meet standards / regulations Coverage

Risk Factors
A contractor might get booked for not meeting the standards of his work as promised.
Solution
Surety bonds can be taken to guarantee that an insurance company will reimburse your client when your business fails to meet its standards.

Note:  Please talk to your financial consultant to check all the facts before proceeding

Employee theft Coverage

Risk Factors
If any of your worker / employee steals anything on the construction site, you may suffer a loss.
Solution
Surety bonds can be taken to reimburse the loss when your employee does something like this while on work.

Note:  Please talk to your financial consultant to check all the facts before proceeding

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