What is surety insuranceby Ira Bowling
We often come across many confusing terms when it comes to legal issues. When two parties come into a contract that involves a consideration, for instance, payment of a certain amount of money, then there has to be a clause that will protect each party in case of breach by either party. 4.What is surety insurance is a phrase that then lingers in many people’s minds countless times without answers?
Well if you are wondering what it is, then worry not. A surety insurance, commonly known as a surety bond serves as a “promise” to pay the borrower’s debt in case this party fails to abide by the agreement.
In a nutshell, it protects the “obligee” from accruing loses in case the principal fails to perform his obligations.
A surety insurance always involves three parties as seen above. The first party who is known as a principal, and can be a company or an individual, is the one responsible for purchasing the insurance. He purchases this insurance as an assurance to the second party who is known as the “obligee” that his obligations will be met. The third party is the guarantor, who is always a surety insurance company. The company is the one that takes all the risks in case the principle fails to meet his obligations of payment.
Have to be considered for a surety insurance to exist. The guarantor must have received some consideration, and at the same time all parties must legally be able to conduct or enter into contracts. The duties of the guarantor will end only after the contract is successfully completed. The contract can either end through agreement or after the fulfillment of each party’s obligation. What one is supposed to know is that the guarantor’s obligation can never be greater than the original obligation of the principal.
Permit surety bond
There are several forms of surety bonds which serve different purposes. For instance, Permit surety bond always ensure that agents such as car dealers and mortgage brokers perform their duties in accordance with the law. The same insurance can apply to officials who hold the public offices. Sure insurances also exist to protect employers against employee dishonesty.
With the above clearly stated, the question should not be 4.What is surety insurance, but how can I get a surety insurance? Well, it is simple, one only needs to visit genuine surety bond companies who will, in turn, serve them as requested.
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