Surety Insurance Basics

Understand surety insurance specifics prior to signing the bond

Surety insurance gives a business credibility by showing the client you are able to meet your obligations. Surety insurance or bonds can be written for almost any purpose, including financial purposes. For example, a janitorial company that cleans a bank must be bonded in case any money or assets go missing while the janitorial staff is cleaning the institution.

Choosing the most appropriate surety insurance and understanding the insurance contract means you must be familiar with all the surety insurance basics. Consider the following suggestions to help you:

1. Determine the type of surety insurance your company needs.

2. Make sure you understand the surety insurance lingo.

3. Familiarize yourself with endorsements and industry specific options for surety insurance coverage.

 

Learn about the types of surety insurance

Before you purchase surety bond insurance, it is important that you understand the specifics of both types of insurance. Contract surety bonds are usually used by construction companies to guarantee the quality and timeliness of a job. Commercial bonds are used by numerous types of companies, including cleaning services, to guarantee that certain obligations will be met.
Try: Safeco Insurance offers lists of the most common surety insurance for different industries to ensure your business has all its needs met. You can find information about the different types of surety insurance at Surety Information Office.

Understand surety bond insurance terminology

When talking with a surety insurance company representative, you may find that you don't fully understand some of the terminology regarding the coverage. Prior to contacting surety insurers, you should familiarize yourself with terms like capacity, which is used to describe the amount of a bond a surety can guarantee, or penalty, which is the limit placed on the bond.
Try: You can find a list of common surety insurance terminology, including surety life insurance terms and surety title insurance terms at Surety Title. CNA Surety offers a glossary of terms used by surety insurance companies, including a surety life insurance company.

Understand specialty surety insurance

Once you begin to get quotes for your surety insurance, you may find that you have to decide on specific endorsements or special types of bonds that fall in your industry options. Understanding these options before signing a bond is vital to ensure that you have the coverage needed.
Try: Surety Title Agency offers a list of endorsements with detailed explanations. This company offers the information in plain text on the website or you can click on the link to download the information and samples in PDF format. Worldwide Insurance Specialists offers a blog that has detailed information about some of the most common types of specialty surety insurance, including financial surety insurance.

 

• Surety insurance carriers must be licensed by the state in which you live. Before doing business with any company, get referrals from other businesses in your area and verify that the surety insurance company has a valid, current license in your state.

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