Call Us 817-590-9725 ☰ ˟
TMD Surety Bonds
Call Us Today
817-590-9725
  • Home
  • Start a Quote
  • Available Surety Bonds
    • Available Surety Bonds
    • License & Permit Bonds
    • Texas Certificate of Title Bond
    • Mixed Beverage Bond
    • Over Axle & Weight Bond
    • Motor Vehicle Dealer Bond
    • Notary Bond
    • Freight Broker
    • View All

    • Federal Bonds
    • Medicare DMEPOS Bond
    • Property Broker Bond
    • View All
    • Commercial Bonds
    • Sales Tax Bond
    • Janitorial Service Bond
    • View All

    • Fidelity Bonds
    • Dishonesty Bond
    • ERISA Bond
    • Name Schedule
    • View All
    • Construction Bonds
    • Bid Bonds
    • Texas Performance Bonds
    • Payment Bonds
    • View All

    • Other Popular Bonds
    • Roofing Contractor
    • Waste Transport
    • View All
  • Surety Bond Resources
    • Surety Bond Resources
    • Bond Glossary
    • Document Library
    • FAQs
  • About Us
  • Payment
Icon

Title Bond

We browse through a wide variety of coverages and find the right one for you.

Get a Quote
Icon

Motor Vehicle Dealer Bond

We browse through a wide variety of coverages and find the right one for you.

Get a Quote
Icon

Mixed Beverage Sales & Gross Bonds

We browse through a wide variety of coverages and find the right one for you.

Get a Quote
Icon

Over Axle & Over Weight Bond

We browse through a wide variety of coverages and find the right one for you.

Submit Request
Icon

Performance Bond

We browse through a wide variety of coverages and find the right one for you.

Get a Quote
Icon

Freight Broker Bond

We browse through a wide variety of coverages and find the right one for you.

Get a Quote
Home > Blog > How Do Surety Bonds Work?
WEDNESDAY, NOVEMBER 20, 2019

How Do Surety Bonds Work?

Contractor On Job SiteSurety refers to an agreement that makes sure that one party will receive what they are owed from the other party. The person or organization who will have to pay the debt in the event the debtor cannot make the payments is referred to as the surety or the guarantor.

Here's more about how surety bonds work.

How Do Surety Bonds Work?

Surety is most helpful when one party is uncertain whether the other party will be able to fulfill the requirements of the contract. In order to reduce risk and ensure that they receive what they are owed, one party may require the other party to enter the contract with a surety or guarantor. One advantage of surety is that it reduces the risk of the party doing the lending. Another advantage is that the borrower may enjoy lower interest rates due to the reduced risk.

A surety bond is a contract that is legally binding. This contract is entered by the surety, the principal, and the obligee. The obligee refers to the party that requires the bond. The principal refers to the party who must pay the debt. The surety refers to the party that is responsible for guaranteeing payment of the debt. In many cases, the obligee is a government entity. The principal is typically an independent contractor or a business owner.

In general, a surety bond does nothing unless the principal is not able to make the payments that are due to the obligee in a timely manner. The guarantor will then be responsible for paying the obligee what they are owed. However, this in no way means that the principal is off the hook. The guarantor will continue to try to collect the amount of the debt from the principal. One of the main advantages of a surety bond for the obligee is that it saves them from having to spend time and resources trying to recollect the money that they are owed. However, while this may make a surety bond sound like insurance, there are many key differences between the two.

There are many advantages that a business can enjoy by being bonded. If you're interested in how surety bonds can benefit your business and your customers, don't hesitate to contact us. You can also reach out to us if you want to learn more about how surety bonds work.

Contact Us

Posted 10:00 AM

Tags: bonds, surety bonds, tmd surety bonds
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019

  • bonds(10)
  • surety bonds(8)
  • tmd surety bonds(6)
  • business(4)
  • surety(4)
  • surety bond(4)
  • insurance(3)
  • fidelity(2)
  • performance bonds(2)
  • bid bonds(2)
  • risks(2)
  • title bond(2)
  • coverage(2)
  • dishonesty bonds(1)
  • clients(1)
  • vehicle(1)
  • dishonesty(1)
  • companies(1)
  • construction(1)
  • dealer(1)
  • federal(1)
  • covid-19(1)
  • boat title bond(1)
  • motor(1)
  • maintenance(1)
  • bond(1)
  • employee(1)
  • storage(1)
  • car(1)
  • name schedule bond(1)
  • commecial(1)
  • performance bond(1)
  • moving(1)
  • auto(1)
  • fidelity bonds(1)

View Mobile Version

Contact Us Today!
817-590-9725

Facebook Google Maps LinkedIn YouTubel

Resources

  • Products
  • Make a Payment
  • About Us
  • Blog
  • Contact Us

Contact Us

2435 Gravel Drive | Fort Worth, TX 76118
Office: 817-590-9725 | Toll Free: 855-590-8550 | Fax: 817-590-9728
© Copyright 2019. All rights reserved. | Powered by Insurance Website Builder