The contract business is fueled by the presence of sureties. They have become a regular component for most industries due to the numerous benefits they provide for business owners and customers. Sureties are so critical in guaranteeing the services offered by companies that it would be almost impossible for contract transactions to be carried out without them.
West Virginia surety bonds have become common practice and even a requirement in many different industries. In fact, most industries that require a person to be licensed by the state or federal government often require the licensee to get bonded in West Virginia. A West Virginia surety bond is therefore commonly issued in construction, insurance, licensing and the automobile industry.
NFP is the industry leader in bonding solutions. Contact us today, and learn how to get bonded in West Virginia today. We will properly bond you and/or your business today (in many cases). It only takes a few minutes to apply.
What Is a Surety Bond?
A surety is a legally binding contract between three parties; the principal, the surety, and the obligee. The principal is the business that provides a particular service, while the obligee is the person/business that is receiving the services of the principal.
A surety is normally used to offer a guarantee to the obligee that the principal will honor the stipulations of the contract as agreed upon. Therefore, when the principal issues a surety to an obligee, they are basically saying that they promise to hold up their end of the deal. If the principal fails to fulfill the terms of the contract, the obligee can make a claim against the bond and be compensated for any damages incurred.
An obligee is likely to incur many different types of damages arising from a negligent principal. For example, a principal who offers plumbing services to businesses can end up causing more damages to the plumbing system than were originally present. In such a situation, the business (obligee) would want to be compensated by the plumber for the additional damages incurred. If the plumber is bonded, then the business can make a claim against the bond for the damages.
When a principal requires a bond for their business, they typically obtain it from an insurance company referred to as the surety. The surety is the third party to the bond contract and plays a very important role in the process. The surety is the party that is responsible for issuing the bond to a principal, and honoring the claims made against the bond by an obligee.
The principal normally applies for a bond from the surety, and the two parties will negotiate the bond amount, cost of premiums, and how the principal will repay the surety should a claim be made on the bond. After the agreement, the surety pledges to honor any claims made by the obligee, and to later seek compensation from the principal.
Part Credit, Part Insurance
From how bonds work, we can see that they play two important roles. They act as an extension of credit to the principal, and insurance to the obligee. This is because when obligees make a valid claim on the bond, they will be compensated by the surety company.
On the other hand, when the surety has to honor a claim made on the bond, the principal will not have to incur high out of pocket expenses at the time the claim is made.
Kinds of Surety Bonds in West Virginia
- Real estate broker bonds – real estate brokers and salespersons operating within the state are required to issue a $2000 bond. The bond ensures that real estate brokers abide by the provisions of the code of West Virginia governing real estate transactions. Brokers who violate the code and cause damages to be incurred by customers and other involved parties can have a claim made against the surety. Customers have a higher level of confidence when dealing with real estate brokers because they have protection against incurring financial damages.
- Oil, gas and waste disposal bonds – oil and gas bonds are issued for companies that operate oil and gas wells in the state of West Virginia. Oil and gas operators are typically required to follow certain guidelines regarding the well and the disposal of waste products. Most oil wells are required to be plugged and abandoned after the work has been completed on site, the surrounding land needs to be reclaimed, and all waste/excess materials also need to be cleared. A claim can be made against on bond if the principal violates their responsibilities and causes damages to persons or the state.
- Collection agency bonds – collection agencies working within West Virginia need to post a $5,000 bond in order to legally operate in the state. The bond ensures that collection agencies remain compliant with the code of West Virginia regarding collection laws for debts. Collection agencies are required to follow strict guidelines when collecting debts from persons and remitting monies to clients. As a result, clients can be compensated for any code violations by making a claim on the surety.
- Vehicle dealer bonds – auto dealers in the state are required to issue a $25,000 bond for their operations. The bond ensures that vehicle dealers do not commit any fraud pertaining to the sale and purchasing of automobiles. Auto dealers who fraud buyers, financial institutions or other involved parties can have a claim made against the bond.
A list of commonly requested bonds in West Virginia is provided below.
How Do I get Bonded in West Virginia?
Businesses that don’t issue sureties to their customers are lagging behind in the business world. Surety binds demonstrate accountability, trust, and professionalism in services offered. Getting bonded in West Virginia for you or your business has been made quick and easy. You simply need to apply for one from a surety company. Most companies now accept online applications.
When applying for a bond, you will be required to provide information about you, your business and the type of bond you desire. You will also need to provide some background financial information so the surety can determine if you qualify for the bond. In addition, a credit check may be necessary to ascertain credit worthiness.
When a surety reviews your application, they will determine the bond amount, monthly premiums and the cost of the bond to you. Most bonds will cost 1%-15% of the face value of the bond in West Virginia. NFP is your one-stop shop for all your bonding needs. We know the questions to ask to save you money, and properly bond your business.
Our team provides affordable every West Virginia surety and fidelity bond insurance. Apply for your West Virginia surety bond now by completing our online application, or download an application to complete and email to our bond agency for processing.
Below is a list of bond types often requested in West Virginia.
- Car Bond
- Mortgage Broker
- Notary Public
- Private Investigator
- Process Server
- Defective Lost Title
- Utility Deposit