Surety Bonds

We have the right surety bonds for your business needs. When you need a sales tax bond, fiduciary bond, ERISA Bond, or license bond, Beach & O’Neill Insurance Associates can help.  We write all types of general business related surety bonds based on our client's needs.

In addition to general purpose bonds, we also write specialty bonds for the construction industry including:

  • Payment and performance bonds   
  • Subdivision improvement bonds
  • Contractor's license bonds
  • Union welfare bonds
  • Court bonds to bond around liens


How do Surety Bonds Work?

Surety bonds are a legally binding contract guaranteeing that certain tasks will be fulfilled.

  • Principal: The person or business purchasing the bond to guarantee their work promise.
  • Obligee: The entity, such as a government agency or client, requiring the bond.
  • Surety: The insurance company that backs the bond.

If the principal fails to adhere to regulations or complete the task, the obligee may then file a claim. If the surety company finds the claim valid, it will make a reparation payment to the obligee up to the amount of the bond. The surety will then seek reimbursement from the principal to recover the amount paid.


Surety Bonds vs Business Insurance

Surety bonds are often confused with business insurance, but they are actually two different tools for business risk management. A surety bond acts more like a line of credit in the event the principal fails to keep their end of a legal contract. Business insurance protects the financial interests of the insured. Surety bonds protect the financial interest of the obligee. The biggest difference between a surety bond and business insurance is that a surety company will seek reimbursement for claims paid out.  In contrast, insurance companies typically do not seek repayment (beyond their deductible amount) for claims under standard business related insurance policies.

Both surety bonds and business insurance are important tools for transferring risk.  If you have questions on surety bonds, please contact our office and we will assist you with your bonding needs.