BOND SURETY

Surety is a form of an age-old legal contract that has a well-documented history in commercial and personal transactions around the world.

A Surety Bond is a three-party agreement by which the Surety binds itself to discharge the contracted obligations of a principal, to an oblige, should that the principal fail to fulfill their obligations.

Contract Surety

The construction industry is a frequent user of Contract Surety Bonds as the Surety Bonds are required for government projects and are often a condition of private and institutional sector tenders.

Contract Surety Bonds, via the Surety Company’s strength and rigorous pre-qualification procedures, provide security to owners, sub-contractors and others. These bonds guarantee that a contractor will execute the plans and specifications, in a timely and cost efficient manner, or the bond will respond.

In the construction industry, the Surety is usually referred to as the Bonding or Surety Company. The obligee is typically the owner but also may be a general contractor or a major sub-trade contractor. The principal is typically a contractor.

Commercial Surety

Commercial surety is made up of the following major classes of bonds: Customs & Excise, Licence & Permit, Fiduciary, and Lost Document. There are numerous other special commercial bonds.

Commercial Surety Bonds have proven to be a cost effective method of complying with a variety of laws and regulations.

Most Commercial Surety Bonds are mandated by the relevant government body, "obliges". These agencies specify the requirements to conduct various acts and to comply with regulations that pertain to particular business activities. Entities, or "principals", wishing to undertake such business activities are responsible to provide the required bonds. Certain private sector transactions also call for commercial surety bonds, whereby the Surety's obligation is limited to the bond penalty.