There are many different types of surety bonds issued in the state of New Hampshire, but they all serve the same general purpose in providing protection for the parties involved, and in some cases the general public as well. Surety bonds provide a measure of assurance that the principal purchasing the bond will live up to certain standards identified in the bond, so that people or organizations using the principal’s services are not defrauded, or in any way victimized by poor performance, shoddy workmanship, or non-compliance with relevant laws and regulations.
As an example, a license and permit bond is required of some contractors as a condition of operating within state borders, and since it requires those professionals to have attained a level of training prior to hiring out, consumers are somewhat protected. Since the contractor would eventually have to pay for any damages claimed against the bond by a consumer, that adds another layer of protection against abandonment or sub-standard work.
What Is a NH Surety Bond?
A bond is essentially a contractual agreement between three parties, a surety company that issues the bond, a principal who purchases the bond, and the obligee, which is an individual or company requiring the principal to be bonded as a condition of employment. Each bond issued is unique in that the terms specified within the bond identify requirements of completion for a specific job or project, as well as a dollar amount that can be claimed by the obligee in the event of unsatisfactory work on the part of the principal.
How Do Surety Bonds Work?
Functionally, sureties work much the same as an insurance policy would. In both situations, a certain party seeks out a company willing to issue the bond or insurance policy, for which a fee is paid. If certain criteria specified in the language of the insurance are met (or not met, in the case of the surety bond), the financial organization would be required to pay out a sum of money, which would have been pre-specified in the terms of the document.
The party that is actually protected by the bond or the insurance is not the purchaser, but rather the client, and not the principal. If a principal fails to live up to the terms of a surety bond in some way, for instance, by abandoning the work before completion, the obligee party would be entitled to make a claim against the dollar amount of the surety bond.
The company providing the surety would then be obliged to pay out that sum of money to the claimant, and would later seek to be reimbursed by the defaulting principal. Since the principal or the contractor would ultimately be responsible for any claims made against the bond, it acts as a powerful incentive to live up to the terms of the agreement, and do acceptable, professional work on the project. Any contractor who has a claim made against a bond on a project will also suffer damage to his reputation, and may find it difficult to find future employment in the same field.
If you’re ready to get bonded in New Hampshire, please reach out to us. We’ll show you how easy getting bonded can be.
Common Types of Surety Bonds in New Hampshire
Although there are literally hundreds of different types of bonds issued within the state of New Hampshire, all of them fall into two basic categories: commercial sureties and contract or construction sureties. Commercial bonds include subcategories such as fiduciary bonds, tax bonds, license and permit bonds, fidelity bonds, public official bonds, and court bonds. It can accurately be stated that the broad category of commercial bonds includes every kind of bond not explicitly included under construction bonds. Construction or contract bonds are of course, specific to the construction industry, and include such subcategories as site improvement bonds, bid bonds, performance bonds, and supplier payment bonds.
Industries that Require Surety Bonds New Hampshire
As you might expect from the above, one of the biggest industries making use of bonds is the construction industry, and for very good reason. Since major construction projects rely upon the contributions of a number of contractors and subcontractors, it’s extremely important that all of these individuals do satisfactory work, observe all appropriate laws and regulations relevant to the work, meet project deadlines, and live up to any terms explicitly identified in the bond. If all these contractors were not obliged to uphold the terms specified in a bond, it is probable that most major construction projects would have difficulty making deadlines, and the workmanship in specific areas could be very questionable.
Another industry that makes extensive use of bonding solutions are all levels of government, from town level all the way up to the federal government. Since government agencies typically have a vast number of public projects to be worked on in any given year, the same urgency for consistent workmanship and compliance with government regulations becomes very crucial. It’s quite common for government agencies to impose very specific standards for bidding and hiring of contractors to work on these projects, and one of the most common requirements is that contractors be bonded. Bonding assures government agencies that work will be done reliably and professionally, so taxpayers’ money will not be wasted.
How to Get Bonded in New Hampshire
One can obtain a bond in the state of New Hampshire by applying online, and this includes almost any kind of surety bond you might need. The process is fairly simple, starting with the submission of your application to a surety company willing to underwrite the bond. Once your application is received and approved, the surety company will write up the terms specified into an indemnity agreement, which will be returned to the applicant for signing and notarizing. After the indemnity agreement has been notarized and returned to the surety company, the actual bond can be issued and delivered back to the principal.
NFP is a respected and trusted surety bond company and is authorized to sell both bonds and insurance for your professional needs. Before checking with any other surety company, contact us for the best rates and the most hassle-free experience in purchasing your surety bonds.
Our team provides affordable New Hampshire surety bonds and fidelity bond insurance. Every New Hampshire surety bond is prepared on a specific NH bond form, as prescribed by the entity requiring the bonding (known as the obligee). Apply for your New Hampshire surety bond now by completing our online application. Call us with any questions you may have, and learn how to get bonded in New Hampshire today.