Bonds Quote Forms
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Although your business likely prioritizes delivering promised goods and services to clients, even the most diligent and experienced organizations may eventually struggle to do so. Circumstances beyond your control or unpredictable incidents may set back progress, delay timelines or impact the quality of your products. With that in mind, you must maintain potential recourse for your clients to recoup losses following these situations.
What Is a Surety Bond?
Surety bonds may be a crucial component of risk management for your organization. The types and purposes of bonds can vary, but generally, they provide financial guarantees that your business will fulfill its contractual obligations or adhere to specific regulations. As such, surety bonds can help clients feel confident when they enter into business arrangements with your organization. Furthermore, by ensuring that your clients have a way to recoup losses for which you may be responsible, you may be able to protect your reputation and avoid losing future business opportunities.
Surety bonds may be required for your business to qualify to bid on certain contracts or projects and can generally be seen as binding agreements between the following three parties:
- The principal is responsible for purchasing surety bonds if required to do so to ensure the financial interests of the obligee.
- The obligee determines if surety bonds are necessary and may issue such a mandate to ensure they can recoup potential losses.
- The surety underwrites and maintains surety bonds and pays the obligee if the principal fails to fulfill their duties. The surety may then pursue repayment from the principal.
There are many types of surety bonds, including the following:
- Warranty bonds (also known as maintenance bonds)
- Fiduciary or probate bonds
A qualified insurance agent can help your business understand its surety bond options and make optimal selections.
What Is Bonded and Insured?
Your organization must take steps to protect its finances and secure its future. Even a single accident or error could have significant ramifications that may derail your operations. Fortunately, by acquiring and maintaining both surety bonds and insurance, your business may enjoy the following benefits:
- Limited out-of-pocket costs and protection from financial losses
- Added trust from your clients
- Fulfillment of client requirements for certain projects or contracts
Get the Right Bonds
With nearly 40 years of experience serving individuals, families and businesses in Massachusetts and New Hampshire, Schaffner Insurance Agency is well-equipped to help your business protect itself with optimal coverage solutions. We will work with you to analyze your circumstances, assess your insurance and bond needs and provide optimal protection. Contact us today to get started.