Bonds are one of the products insurance companies offer to satisfy their customers’ needs. It protects consumers, municipal or federal government from harm. Some sureties offer protection against fraud; others guarantee contract performance. Typically, three parties – an obligee, a principal and a surety company – agree to adhere to the legal terms of a bond. Many, many bonds are available. Find a good Utah surety company for guidance in your particular situation.
How Do They Work?
- Application and issuance process – governments and private companies set in motion the bond process when they make it a requirement that a party dealing with them provide a bond. The principal applies for the specific surety required. The surety (usually an insurance company) looks at the application and makes either a favorable or adverse determination depending on certain considerations. If they approve the application, they send an electronic form of the document to the applicant. They send the physical copy to the customer’s address. You present the physical copy to whoever requests for it. With a good Utah surety bonds company, this is a one-day affair.
- Contract performance – if you perform the contract accordingly, the obligee approves the project as duly completed and pays you.
- Non-performance of contract – if the principal has not performed the contract as expected, the obligee can claim against the bond. You should always ensure that this does not happen. Surety companies may not want to deal with individuals and entities against whom claims have been successful in the past. Moreover, it is difficult to get future contracts. The surety investigates the claim and if satisfied you have not performed according to the contract, they pay the obligee. You have to pay back to the bond company every cost they have incurred in the claim process, including the claim amount.
Types of Sureties
There are thousands of bond types available in the Utah bond market. What’s more, surety companies create new bonds every time a new bond need arises. The sheer number of these bonds can be a bit overwhelming. Your trusted and experienced surety company can guide you on the best bond type for your need.
We can classify bonds as follows:
- License and permit
License and permit bonds – local or state government departments require this type of bond before they can issue professional licenses. Examples of such bonds are auto dealer bonds, construction license bonds and seller of travel bonds.
Commercial bonds – this is an all-encompassing term that even includes license and permit bonds. Commercial bonds include all types of bonds that don’t fall under either construction bonds or court bonds. Common types of these boards are lease deposit bonds, and fidelity bonds such as business service bonds and commercial contract bonds.
Court bonds – courts of law typically require these bonds for specific legal appointments and proceedings. The most common types of court bonds are guardian bonds, injunction bonds, appeal bonds and estate bonds.
Construction bonds – local, state and the federal governments, require construction bonds for all public construction contracts with a value of over $100,000. This bond became a requirement for the establishment of the Miller Act of 1935, which governs explicitly public construction projects. Different states have come up with their own “small Miller Acts,” which means you may need to obtain construction bonds even when the project’s value is under $100,000. Construction bonds guarantee public project completion, whether the current contractor succeeds or not. Examples of construction bonds are supply bonds, payment bonds and performance bonds.
Industries that Require Bonds
There are many different industries across the US economic landscape that require bonds. Some of the industries that require bonds are:
- Travel and tourism: if you are an agent who makes a living selling travel packages, you need to obtain a seller of travel bond. This is a state requirement. It protects consumers against fraud, breach of contract, and misrepresentation.
- Construction: if you are a contractor or a subcontractor working in the vast construction industry, you need to arrange for construction bonds. If you are a subcontractor, the main contractor for a government construction project may require you to provide bonding.
- Automotive: let’s say you want to start a dealership in your state. You need to secure a license before you can establish your business. Your state will ask you to obtain bonding before they can process your permit. The government wants some kind of certainty that you will work within the confines of the industry’s standards and business ethics.
- Cleaning: are you a business person offering home and office cleaning services in your state or county? A business service bond, which is a kind of fidelity bond, is what you need. This bond works like insurance, according to SBA (Small Business Administration).
How to Get Bonded in Utah
If you are sure of the type of surety you want/need, you can apply online. You can make payment for the bond online as well. Our team will send you both an electronic version and a hard copy. If not sure of the specific type you need, give us a call. We’ll walk you through getting bonded in Utah today.
There are times different authorities will require you to provide a relevant bond. Other times, you may decide to get bonded in Utah to enjoy specific benefits. Sureties guarantee safety from harm caused by non-compliance.
We provide affordable surety bonds in Utah as well as fidelity and fiduciary bonds. Every Utah surety is prepared on a specific Utah bond form, as prescribed by the entity requiring the bonding. Below is a list of surety bonds commonly requested in Utah.
Apply for yours now by completing our online application. If you prefer, download an application to complete and email to our bond agency for processing. Quotes are always free.
- Utah Contractor license
- Mortgage Broker
- Notary Public
- Private Investigator
- Process Server
- Sales Tax
- Defective Lost Title
- Utility Deposit