What is a Surety Bond?
A surety bond or surety is a promise to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal’s failure to meet the obligation
What does a Surety Bond guarantee?
A surety bond, put simply guarantees that a contract will be fulfilled. There are many types of Bond but in general there are three parties involved. It could be a builder guaranteeing a home owner that they will complete a house build (contract bond), or it could be a contractor completing an estate for a county council, and guaranteeing those works (development bond). Other types could be guaranteeing that you will supply a certain amount of goods at a certain price (supply bond) or that you will pay taxes & duties to Revenue, once you have been paid (duty deferment bond).
How do I apply for a bond?
Applying for a Bond through Surety Bonds is quick and easy. Our easy to complete, application document is step 1. and getting together your accounts for preceding years is step 2. If you have been asked for a bond, the project owner may have mentioned certain requirements or bond wording, clarifying these is step 3 – we will need to know the bond wording they require. Once we have these first documents, we present the submission together with some background information on your company to our panel of sureties for terms.
What are the requirements for qualifying or being approved for a bond?
The surety looks at the principal’s credit rating, the financial strength of the company, as well as cash flow and the quality of its financial presentation this will determine if the surety will provide a bond. The types of bonds needed and the duration of those bonds are also a factor.
What are the costs associated with purchasing a surety bond?
As the premium rates differ for all Surety Bond’s depending on the bond type and are determined based on the applicants individual financial situation, there are no particular rates we can outline. An exact quote will be provided once we receive terms from sureties.
How do I know what type of bond I need to purchase?
Our web site has an organized and comprehensive list of bonds. In the event it is not clear, our knowledgeable team welcomes you to contact us directly on 071-9623228 – believe us when we say, we have seen it all!
What is the turnaround time in receiving my bond?
That will depend on all paper work and premium due being received by the surety provider. Our advice is to get your application in early, as the minimum turnaround time is 4 weeks. This includes time involved in getting documents in and receiving terms, the principal and their agents accepting those terms, the principal providing us with the wording they require. All of this being approved by the surety, and the documents being issued for signature and premiums paid.
What do I do once I purchase a Surety Bond?
Most Surety Bonds require a signature of the Principal and some require notarisation. Upon receipt of your original bond, you will want to be certain it is signed and notarized, when necessary, and forwarded to the requiring entity as quickly as possible. You do not need to send it back to the surety once you sign it.
How long is my bond in force?
Generally speaking, Surety Bonds are issued for a particular contract period, plus a maintenance period if required.
Will my bond renew?
Generally construction bonds are not renewable – the original bond will have a start and end date relating specifically to the contract.
Duty Deferment and Customs Warehouse bonds are annually renewable with renewal terms needing to be issued at least sixty days prior to renewal.
What happens if there is a claim made on my bond?
Should a claim be made on your Bond, the Surety company will investigate the matter to determine its legitimacy. In most cases, the Principal will be contacted to supply an explanation of the dispute or situation. It is also useful that any and all supporting and relevant documentation be provided to the Surety which would be of assistance in their investigation of the claim.
Who can make a claim on my bond?
The obligee (beneficiary) but only according to the terms within the bond wording, usually due to insolvency.