Surety and Bond Insurance

Tackling any big contracts means exposing yourself to higher risks that could lead to significant losses for your business. While this is true for major companies in any industry, some like construction are more prone to hazards than others.

Fortunately, assurance in the form of a surety bond can help ease the mind of business owners in this industry. These are forms of insurance that guard against financial losses caused by the failure to complete projects on time.

To learn more about commercial surety bonds insurance and the ways that it can benefit your business, keep reading.

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What is Surety and Bonding Insurance? 

This is a specific form of insurance that covers a company in the event that contractual agreements cannot be met. 

A surety bond is a three-party agreement between the surety (otherwise known as your insurance provider), the principal (the person or company that needs the bond), and the obligee (the party that requires the bond). 

Surety Bond Coverage You Can Count On 

A surety bond protects businesses by covering various aspects of contract performance and financial losses, such as costly legal disputes or other unexpected expenses. 

There are several types of commercial and contract surety and bonding insurance, including:

• Performance Bonds: These bonds guarantee that the principal will fulfill their obligations under a contract.
•  Payment Bonds: These guarantee that the principal will pay their suppliers, subcontractors, and workers.
•  Bid Bonds: These guarantee that the principal will enter into a contract if their bid is accepted. 
• License and Permit Bonds: These ensure the principal’s compliance with licensing and permit requirements, including bonds for contractors and other professionals.
• Court Bonds: These cover legal fees and other court-related expenses for the principal, and ensure that the obligee is compensated in case the court judgment is against the principal.
• Employee Dishonesty Bonds: These cover losses resulting from employee theft or dishonesty.

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Benefits of Surety and Bond Insurance Coverage 

Risk Mitigation 

Surety bonds help mitigate the financial risks associated with contracts and obligations. 

Competitive Advantage 

Contract surety bonds also help businesses demonstrate their financial strength, giving them a competitive advantage.

Increased Credibility 

Having surety bonds can increase a business’s credibility and reputation.

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How Surety Bond Insurance Works

A contract surety bond provides a degree of certainty that contractual agreements do not, giving your business financial protection in case the contract terms are not met by their deadline or as efficiently as expected.

Do You Need Surety and Bond Insurance? Industries We Serve

Surety and bonding insurance is considered essential in the construction industry. This sector is built on contractual agreements and it’s not uncommon for there to be significant financial loss in the event that these terms are not met.

For instance, imagine that a business pays for renovation work and is closed temporarily while that construction work is being undertaken. They will have calculated how long they can afford to suspend operations for and they have even received an insurance payment to cover them during this time. But if that renovation work extends days, weeks, or even months beyond the target date, then they stand to lose much more money than they bargained for.

This is where surety and bonding insurance comes in. If you are in this industry and deal with large contracts and require the terms of those contracts to be followed exactly in order to avoid losing money, then you will benefit from construction bonds.

Some industries we serve include:

• Construction Industry
• Real Estate Industry
• Energy Industry
• Transportation Industry
• Professional Services Industry

By providing coverage against losses resulting from the failure to fulfill their contractual obligations, surety bonds also help businesses in the construction industry avoid costly legal disputes and other unexpected expenses.

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Why Choose KASE Insurance

Our team of hard-working, highly experienced brokers can help you find the insurance policy that is right for you, ensuring every facet of your business operations is protected. 

You won’t pay unnecessary fees for anything that you don’t need—which is exactly what insurance should be. With KASE Insurance, that’s the way it is.

• We are independent: We are not tied to any insurers unlike the majority of our competitors.
• We’re invested in your success: Your success and growth are our greatest reward.
• We have your back: Our risk analysis of your business will be exhaustive to ensure all risks are identified, understood, and managed.
• We’ve got what you need: We offer a full range of insurance solutions to provide you with a full brokerage experience.
• We’re your biggest fans: We will promote your business to our client base and a wider audience via our social media channels.

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Protect Your Business from Financial Loss With Surety and Bond Insurance

KASE Insurance promises to provide you with the best surety and bonding insurance in Ontario.

We are one of the highest-rated insurance brokerage firms in the Greater Toronto Area and have been recognized by industry experts for our innovative, customer-centric approach. Our team of expert surety brokers and underwriters are committed to providing your company with affordable and comprehensive surety and bond insurance.

Get in touch with a KASE Insurance broker today.

Frequently Asked Questions

What is the difference between a bond and a surety?

Bail bonds are used by a defendant in a criminal or civil trial to pay a bail amount that’s set by a judge, acting as an assurance that the defendant will appear in court for their trial.

Meanwhile, a surety bond is a guarantee that a task or project will be fulfilled. While a bail bond involves the court and the defendant, a surety bond is a three-party agreement.

What factors affect my bond insurance premium?

Many factors affect the cost of your surety bond, including your credit rating, general interest rates, the kinds of surety bonds you have, and inflation.

How do I choose a bonding insurance provider?

Reputation is important when it comes to business, and this is especially true when it comes to contract bonds and your surety company.  This is why it’s important to verify that the bonding insurance provider is licensed and that they have the specific type of bond you need.

Next is to check the company history. Always read reviews and conduct some research about the company’s ratings. This will help you determine if they are trustworthy.