Insurance bonds, also known as surety bonds or fidelity bonds, are contractual agreements that include three parties: the principal (the party purchasing the bond), the obligee (the party requiring the guarantee), and the surety (the company issuing the bond). Even so insurance and bonds involve financial protection, they have different purposes. An insurance policy compensates for losses from unexpected events. Bonds provide a financial guarantee that principal`s obligations will be met. If the principal fails to do so, the surety will compensate the obligee for damages up to the amount of the bond.
Many businesses, legal professionals and licenses holders need insurance bonds. Contractors and construction companies need bonds like bid bonds, performance bonds, payment bonds to provide financial protection for construction projects.
Businesses purchase bonds to protect themselves against employee dishonesty and fraud. Legal professionals may need bonds like notary or court bonds to protect public from financial harm and guarantee legal compliance and performance.
Licenses holders obtain bonds to receive and maintain their licenses.
Alan-Smith Insurance is highly knowledgeable and experienced in providing a broad insurance bond services. Our team will assess the needs for a bond and will guide you through the process of obtaining a bond to ensure for a seamless and stress free experience.
