Surety Bond: A Legal Contract Ensuring Debt Payment
A surety bond is a legal contract between three parties. The bond assures that a legal debt will be paid to the creditor. Learn how bond insurance coverage works, then consult with an agent who serves Erie, CO if you need further assistance.
Understanding Bond Insurance
Bond insurance coverage assures that a bond is paid as agreed, including the principal and any scheduled interest. The bond issuer acquires the insurance through a bond insurance agent. The insurance company is essentially the third party in a bond agreement. If the bond issuer defaults, the insurance company will be liable for the debt owed.
Risk Assessment in Bond Insurance
Before a bond issuer is granted insurance coverage, their risk rating will be assessed. A bond issuer’s premium will be based upon their ability to hold up their end of the financial agreement that is outlined in the bond paperwork. The contract is legally binding. The bond issuer and creditor will each receive a copy of the surety bond insurance paperwork.
Benefits of Surety Bond
Consider the benefits of issuing a surety bond. A surety bond may increase customer satisfaction, make a customer confident about doing business with you, and reduce the risks that a customer faces when doing business. If a customer isn’t familiar with your services, they may like the peace of mind that a surety bond offers.
Insurance Agent Information and Guidance
If you haven’t dealt with surety bonds before, you may have some questions that a licensed insurance agent can assist you with. Feel free to contact an agent at Advantage Service Insurance. An agent will discuss the bond insurance process with you. If you decide to issue a surety bond, you will receive further help with preparing your insurance policy.
