Surety Bonds in Burbank, CA
Surety bonds are an essential part of many contracts, agreements and transactions. These financial instruments can create a financial safety net for parties involved in formal business arrangements. At Roman Empire Insurance Agency Inc., we’re proud to offer comprehensive guidance regarding surety bonds.
What Is a Surety Bond?
A surety bond is a contract that guarantees the performance of a specific obligation. It involves the following three parties:
- The principal is the party that purchases the bond and is obligated to fulfill a contract.
- The obligee is the party that requires the bond and is financially protected should the principal fail to meet their obligations.
- The surety is the party that issues the bond.
What Are Different Types of Surety Bonds?
There are several types of surety bonds, with two of the most common primary classifications including the following:
- Contract bonds—These bonds can act as a financial guarantee that a contractor will fulfill their obligations as per a construction contract, providing fiscal security and peace of mind for developers and project owners. There may be several subsets of these bonds, including performance bonds and payment bonds.
- License bonds—This type of surety bond is often required by government agencies for professionals to get a license in certain industries. This category may include many variants, including auto dealer bonds, mortgage broker bonds and contractor license bonds. License bonds generally ensure compliance with laws and regulations and protect consumers from potential damages.
We’re Here to Help
Understanding surety bonds and their various types can help businesses navigate contractual relationships more confidently and securely. Contact the team at Roman Empire Insurance Agency Inc. today to learn more about your options.