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How to Get Bonded


A surety bond is a three-party contract that guarantees the customer (or obligee) that the principal (or obligor) will fulfill all the terms of their contract. If the obligor does not fulfill the terms, the surety (e.g. a bank, insurance company or bonding company) will compensate the obligee (and then recover the amount from the obligor) [source: Business Dictionary].

Many customers prefer hiring a company that's bonded because bonding offers them protection in case the company doesn't keep up its end of the deal. For example, if a contractor doesn't finish the renovations he promised, the customer can make a claim with the surety. Failure to adhere to the contract may result in forfeiture of the contractor's license [source: Apostille US].

When applying for a bond, you (i.e. the obligor) will need to provide the following information to the bonding agency:

  • Name
  • Address
  • Birthday
  • Social security number
  • Your spouse's information (if you're married)
  • The information for anyone who owns more than 5 percent of the company
  • Business name
  • Business address
  • A financial statement from your business
  • Personal financial statements from every owner with more than a 5 percent stake in the company

[source: Bryant Surety Bonds]

The obligor will also have to pay the bonding agency an annual premium.

The obligee must provide the following information:

  • Name
  • Address
  • Type of bond
  • Amount the bond is for
  • A bond form spelling out the requirements of the bond.

[source: Bryant Surety Bonds]

Additional information may be requested depending on the type of bond you're applying for.

The obligee must provide a bond form spelling out the requirements of the bond. These bond forms differ depending on what state you live in and what type of bond you need. The forms can be obtained from the bond agency or from the state's Web site. [source: Bryant Surety Bonds]

 

 

 


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