The Miller Financial Group is an active member of SBA’s Surety Bond Guarantee Program!
* Approved to offer SBA guaranteed bonds through the SBA’s Surety Bond Guarantee Program.
What are surety bonds?
Customers who enter into major contracts frequently want a guarantee that the hired party will uphold their portion of the contract. When customers want such a guarantee, businesses in Pennsylvania may get surety bonds.
Surety bonds may serve as an additional layer of assurance for major contracts or large purchases. A bond may provide the customer compensation if their purchase or the project fails.
When do businesses in Pennsylvania need surety bond insurance?
Surety bond insurance is often required for major contracts or purchases. Construction companies, car dealers, and fiduciaries in Pennsylvania might all need a bond.
What kinds of bonds do contractors purchase?
Many commercial and government customers require that contractors obtain a bond in order to be hired. There are a few different types of bonds that contractors might need throughout the stages of a large-scale project. The main contractors bonds are:
- Bid Bond: Might guarantee that a contractor will honor their construction bid and proceed with the project if selected.
- Performance Bond: Might guarantee that a contractor will complete the assigned job according to the contract’s specifications.
- Payment Bond: Might guarantee that a contractor will pay all due wages to their employees and subcontractors.
- Maintenance Bond: Might guarantee that a contractor will correct any defects in their work, should any be discovered after project completion.
A knowledgeable agent can guide contractors through the various types of surety bond insurance that they might have to purchase.
What kind of bonds do auto dealers purchase?
Pennsylvania auto dealerships are generally required to secure a dealer bond of at least $20,000 or $30,000, depending on a dealership’s specific details. This is normally a prerequisite for obtaining a motor vehicle dealer license from the state.
The purpose of an auto dealer bond is normally to give customers recourse if their vehicle purchase proves to be fraudulent.
When do fiduciaries need to get a surety bond?
Fiduciaries may be required to obtain surety bond insurance as a means of guaranteeing that they’ll act in the client’s best interest. Some different types of fiduciary bonds are:
- Executor Bond: Typically for overseeing the estate of a deceased who left a will.
- Administrator Bond: Typically for managing the assets of a deceased who didn’t leave a will.
- Guardianship Bond: Typically for handling the assets of a minor or an adult who has a major disability.
- Conservatorship Bond: Typically for administering the estate of a ward.
Who are the parties to a surety bond?
A surety bond normally has three parties involved:
- Surety: Generally the entity that provides financial compensation in the event of a contract breach. This is normally the insurance company.
- Obligor: Generally the party that’s obligated to fulfill the terms of a contract. This is normally the contractor, car dealer, or fiduciary person.
- Obligee: Generally the beneficiary who gets compensation from the bond if there’s a covered breach. This is normally the customer, client, or ward.
An insurance agent specializing in surety bond products should be able to help fiduciaries find the right type of bond for them.
How much does it cost to get a surety bond?
The cost of obtaining a surety bond varies. The bond type, bond amount, and business’s track record are just a few of the variables that can influence cost. Despite these variables, however, these bonds are generally affordable.
An independent insurance agent can check how much different insurance companies would charge for a specific type of surety bond insurance.
Where can businesses and individuals get surety bonds?
If you’re in Pennsylvania and need a surety bond, contact the independent insurance agents at The Miller Financial Group. Our agents have assisted clients with many types of surety bonds, and will make sure you find one that’ll provide the guarantees you need.
