Bonding Q&A

CONTRACTOR BONDING

AND COMMERCIAL SURETY BONDS

What is a bond?

If you are reading this now, chances are that your company has been required to provide a bond in connection with a contract you secured or a license you are obtaining. We are a bonding company, and we are here to help. There are many different kinds of bonds, however they typically fall into two main categories which are contract bonds and commercial surety bonds. Simply stated, a bond is a guaranty or agreement that provides a source of compensation to the organization requiring a bond (referred to as the obligee), in case the firm providing the bond (referred to as the principal) fails to perform as promised in the contract or agreement governing the bond.

A bond is different than an insurance policy in that it is a three party agreement. The principal is the party obtaining the bond that agrees to undertake a specific obligation. The surety is the party who provides the bond and guarantees the principal will fulfill their obligation. The obligee is the party who receives the bond and is the beneficiary of its monetary claim if the principal fails to fulfill their obligation.

Who typically needs a bond?

Contractors are the largest portion of our customer base. Perhaps you are securing a contract that requires a performance & payment bond. Or possibly you are trying to secure a contract but realize a bid bond is required with your bid or proposal. However there are many other business types and individuals who find themselves in need of a bond. Perhaps your business license requires a bond. For example many mortgage brokers, or auto dealers for example are required to provide a bond along with their licensing application to their specific state, city or county. Regardless of your need, contact us so we can help you navigate through the process.

What size bonds does Century Bonding, LLC provide?

We work with a broad range of clients from small independent contractors to large public corporations. As such we can provide bonds from $25,000 to $250 million.