Maryland Surety Bonds
Maryland Surety Bonds
A surety bond is not the same as an insurance policy. It is actually a contract between (at minimum) three parties:
- The Principal: This is the main party that performs the contractual obligation.
- The Obligee: This is typically the party that is requesting the bond and the party that will receive the obligation.
- The Surety: The bonding company that is providing assurance to the obligee that the principal will perform the task as promised.
If the principal fails to perform up to their contractual obligation, the obligee can file a claim against the surety (the bonding company). Here is where it differs from insurance; if the bonding company ends up paying the claim, they will come back to the principal to be reimbursed. Therefore, if you as the principal take out a Maryland surety bond to guarantee your work, you must meet your contractual obligations or you will be held financially responsible by the surety.
There are several types of surety bonds covering a wide range of industries including the federal, state and local government as well as the courts. Some of the more common surety bonds in Maryland include:
- Construction Bonds: Insure that various parties (from project developers to suppliers to builders) will fulfill their contractual obligations during a construction project.
- License and Permit Bonds: Business owners in certain industries (such as auto dealers) are required to obtain a license or permit bond before they commence operations. This is to assure consumers comply with all federal, state, and local laws and regulations.
- Commercial Bonds: Bonds purchased by commercial entities are not for enforcing the terms of a construction project or other type of contract. One example would be a cleaning company that purchases a bond to protect their clients from potential theft by employees while inside their home or business.
- Court Bonds: Courts often require bonds to ensure that certain parties complete the tasks appointed to them by the court. For example, before a person is released from jail, they are often asked to post bail to ensure that they will appear back in court when required. If the person fails to appear, the bail money is turned over to the court.
There are several other types of bonds required to purchase when you enter into an agreement with another entity or the government. At Balderson Insurance, we can provide the right bond for your situation. .
Balderson Insurance is here to provide the right bond for your situation. As an independent insurance broker, we work with several carriers to provide the right bonding solution to fit your requirements and we can usually server any Maryland surety bond needs.. Call us today at (301) 874-0772 for further information and a free quote.