Surety bond is a form of agreement between two parties, where the one party is a guarantee provider (Surety) who gives a guarantee for the Second Party, namely the Principal for the Obligee (Project Owner), that if the party is guaranteed (Principal) by because he was negligent or failed to carry out his obligations to complete the work promised to Obligee, the Surety Party as the guarantor would replace the position of the party guaranteed to pay the maximum compensation up to the guarantee amount given by Surety. Meanwhile, if you want to know more about us, just check out our site where you can find out more about a trusted and reputable contractor bond service company near your area.
So there are 2 types of agreements
a. “Principal Agreement”,
i.e. an agreement made between Obligee (Project Owner) and Principal (Service Provider)
b “Additional Agreement”,
i.e. an agreement made between the Principal (Service Provider) and the Guaranteed Company (Surety Company) regarding the guarantee of the possibility of failure of the Principal to carry out the obligations he promised to Obligee as stated in the principal agreement.
USE OF SURETY BOND
Providing guarantees to the Project Owner (Obligee) that if the Service Provider (Principal) is unable to carry out the obligations as promised, the Surety Company will be replaced.
The process is easier than the Bank Guarantee.
The process is faster and cheaper than the Bank Guarantee.
KINDS OF TYPES OF SURETY BOND
– Bid Bond.
– Performing Bonds.
– Advance Payment (Advance Payment Bond).
– Maintenance Bond.
Labor & Payment Bond Material. (Material Payment & Wages Guarantee).
Excise Duty Bond (Tobacco, Alcohol).
Construction Contract Bond (Guaranteed construction contract).
License & Bond Permit (Ministry of Law and Human Rights).
Court Bond (Confiscates goods).
Fidelity Bond, etc.
That’s it for the information that we can share with you on this occasion. We hope it helps you to know more things about surety bonds.