Surety Program

A surety bond or surety is a promise by a surety or guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal’s failure to meet the obligation.

Flexibility, Reliability, Creativity

In the captive insurance model smaller numbers of principals are participating in the coverage capacity so the relationship can be more personal and the design of the bonds can be flexible to meet the needs of the modern business environment and evolving risk which require more flexibility .
Access to surety credit can seem like an unstable marketplace where availability and willingness to bond contracts is unpredictable. Managing risk in business is much more challenging if bonded contracts are a key to stay competitive.

Types of Surety Bonds

There are many different types of surety bonds. Surety is actually not insurance although it is largely provided by the insurance industry.  The risk is typically underwritten with no expected losses.  The relationship between principal and surety is often much closer than other forms of insurance. Below are several different bond types.


Payment and Performance bonds are often used in the construction industry as a form of protection for an owner that their contractor will complete the job according to the contract and he will pay all of his subs and suppliers.


Compliance and Licensing bonds are often used to maintain a professional license or to obtain permits. There are typically statutory requirements for these types of bonds.


These class of bonds can cover a wide range of court actions including bail, release of lien, adverse cost judgement, and many more.

“Surety Products are slow to respond to the evolving risk transfer preference in financed transactions but captive insurers may hold the key”

Bonds are underwritten the same way that general credit is underwritten. The review will typically involve a financial and skill qualification evaluation when performance is being bonded.
The surety is like a cosigner who is lending credit in exchange for a premium typically much lower than the rate a commercial lender would charge. The surety does not expect to have a loss and in the event they do they will require that you reimburse the loss.


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