What is a Surety Bond?
A Surety Bond is a three-party agreement whereby the surety guarantees to the oblige (the project owner) that the principal (the contractor) is capable of performing the contract in accordance with the contract documents. Performance of the contract, which is the subject of the bond, determines the rights and obligations of the surety and the obligee.
Union State Insurance is a respected surety bond company in Alabama.
Different Types of Alabama Surety Bonds Offered by Union State Insurance
Here are the eight different families of surety bonds:
1. Fidelity Bonds
Fidelity bonds are forms of insurance that cover policyholders for losses that were the result of fraud. If your business is about to embark on a new Alabama venture, it’s always important to have a fidelity bond in case the new venture was fraudulent. Fidelity bonds also insure businesses for losses due to dishonest acts of employees. In the unfortunate event your employee steps outside your company values, you’ll have the peace of mind that any losses incurred on their behalf are covered by your fidelity bond.
2. Public Official Bonds
If you’re active in Alabama politics, you may already be familiar with public official bonds. Public official bonds allow public officials to show they can be trusted for their services. It protects taxpayers in the event of fraudulent services by a public official. There are different public official bonds for different job types such as court clerk, notaries, and law enforcement.
3. Judicial Bonds
If you’re ever involved in a lawsuit, you may need a judicial bond. Judicial bonds are court-ordered bonds to ensure you can pay costs related to legal action. There are judicial bonds for both plaintiffs and defendants.
4. Fiduciary Bonds
A fiduciary bond (also known as a probate bond) is a court bond that holds the fiduciary accountable. If a fiduciary commits fraud, embezzlement, or any other dishonest acts, the fiduciary bond holds the fiduciary liable.
5. License and Permit Bonds
A license and permit bond protect consumers by guaranteeing businesses will play by the rules. Each bond is distinct to a specific industry and offers protection to both governments and consumers.
6. Contract/Construction Bonds (Bid and Performance Bonds)
Contract bonds guarantee that contracts are fulfilled. Traditionally, these bonds are used in the construction industry. However, it can be used for other types of service industries where a contract for work may need to be drafted.
7. Notary Bonds
Notary bonds protect the public from fraudulence or protect notaries from errors and omissions. A typical notary lawsuit can be up to tens of thousands of dollars. Having a notary bond in place protects both the public and the notary.
8. Miscellaneous Bonds
For all other bonds needed for your Alabama business, Union State Insurance has you covered. This includes things such as permits, personal care assistance, lost trust notes, and unemployment.