What is a Contractor Surety Bond?

Commonly referred to as the surety triangle, a contractor surety bond is a three-party contract between:

The Principal – Party that needs the surety bond
The Obligee – Party that requires the surety bond
The Surety – Party that provides the surety bond

How do Contractor Surety Bonds Work?

The surety bond (surety) is a guarantee to the project owner (obligee) that the hired contractor (principal) will fulfill the obligations outlined in an awarded contract.

Do I need to Pay it Back?

It’s important to understand that a contractor surety bond is not an insurance policy. It is essentially a line of credit. If the surety bond pays out, the principal is liable for the debts paid out by the surety company.

Why buy it if I’m required to Pay it Back?

Purchasing a bond can be more affordable than putting up the entire out-of-pocket funds yourself or providing a letter of credit from a financial institution. It is especially beneficial to a contractor with multiple ongoing projects at any time.

Is a Credit Check Required?

Most surety companies require a credit check as an underwriting guideline for calculating the bond premium. However, some companies will waive the credit check as an option for a higher premium.

Can I use a Co-Signer?

Many surety companies allow a co-signer, but in most cases, it may not be a spouse or business partner. A co-signer can be a great asset in obtaining a lower premium for contractors needing a little assistance while rebuilding their credit score.

How long does it take to get my Surety Bond?

In most scenarios, we can quote and electronically issue it within minutes.

What are my Payment Options?

Our programs offer various payment options when purchasing your surety bond.

Full Payment Option – Pay the premium with one payment.
Direct Bill Option – Pay the monthly premium to the carrier directly.
Financing Option – Pay the monthly premium through a finance company.

Why choose Fairbanks Insurance Brokers?

Our licensed operations grant us direct access to the nation’s top surety programs.
It allows us to cut out the middleman to save you valuable time and money regardless of good, bad, or no credit history.