What Are Surety and Bonds?
What Are Surety and Bonds?Ever been told you need a “bond” before starting a job or a project? Or maybe a contractor mentioned it when giving you a quote. If you’ve wondered what that really means, you’re not alone. In this post, we’ll break down what surety and bonds are, why they matter—especially for business owners—and how Paradox Insurance Agency can help.
What Is a Surety Bond?
A surety bond is a promise between three parties:
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The principal – the person or business that needs the bond (like a contractor).
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The obligee – the person or group requiring the bond (like a government agency).
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The surety – the insurance company that backs the bond and makes sure things go as planned.
Think of a surety bond as a safety net. It guarantees that the principal will do the job they said they’d do. If something goes wrong—like the job isn’t finished or the terms aren’t met—the obligee can file a claim. If the claim is valid, the surety steps in to cover the costs.
It’s not the same as regular insurance. Bonds are more like banking than insurance. In a bond, the principal pays the surety back for any losses. It’s more like borrowing someone’s reputation and money as a guarantee.
Who Needs Bonds—and Why?
Surety bonds are common in construction, but they’re used in lots of industries. You might need a bond if you:
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Run a construction or contracting business
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Sell cars, alcohol, or real estate
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Collect debts or manage estates
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Operate as a notary public
For example, imagine you’re a contractor hired to build a new playground for the city. The city wants to make sure the job gets done right and on time. So, they ask for a bond. That way, if something happens—like you go out of business mid-project—they have a backup plan.
Other common types of bonds include:
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License and permit bonds – required to legally do business in certain industries
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Performance bonds – guarantee a project will be completed as agreed
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Payment bonds – ensure workers and suppliers get paid
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Fidelity bonds – protect against employee theft or fraud
How Do You Get a Bond?
Getting bonded is a lot like applying for a loan. The surety company checks your:
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Credit history
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Business experience
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Financials
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Past project performance
They want to know you’re trustworthy and capable. The better your track record, the easier (and cheaper) it is to get bonded.
At Paradox Insurance Agency, we work with all kinds of businesses—from first-time contractors to experienced firms. We also work with a number of surety companies, so we have options. We take the time to understand your needs and help you find the right bond with competitive rates.
Our process is:
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Simple – We explain everything in plain English.
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Fast – We help gather what you need and get you approved quickly.
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Personal – You won’t get a generic response; we tailor the solution to you.
Why Bonds Matter for Your Reputation
Being bonded gives customers and clients peace of mind. It shows you’re responsible and professional. In fact, many jobs—especially government ones—require a bond before work can even start.
Let’s say you’re a small contractor trying to land a big city project. If you’re bonded, the city sees that you’ve got financial backing and take your work seriously. That can give you a competitive edge over others who aren’t.
And for customers, it’s a trust signal. If someone’s hiring you to remodel their kitchen or install a new roof, knowing you’re bonded tells them they’re protected if something goes wrong.
We’re Here to Help You Succeed
Surety bonds might sound complicated, but they don’t have to be. Whether you’re just starting out or expanding your business, Paradox Insurance Agency can guide you every step of the way.
We believe in building strong relationships with our clients. That means listening to your goals, answering your questions, and helping you protect what matters—whether that’s through insurance, bonds, or both.
Have questions about getting bonded? Contact Paradox Insurance Agency for a free consultation today. We’re here to help you move forward with confidence.
