Surety Bonds in Midland, TX

Your business’s clients and customers depend on you to live up to your word and supply agreed-upon services in a timely manner. However, despite your best intentions, your company may inevitably encounter unexpected circumstances that keep it from being able to fulfill such obligations. Financial and reputational repercussions can be severe in these situations, potentially leading to significant fiscal losses and decreased prospects. This makes surety bonds a potentially essential investment.

What Is a Surety Bond?

A surety bond is a loss control instrument often sold by insurance companies to offset potential financial losses. These products essentially establish a financial agreement among the following three parties:

• The principal (e.g., a contractor or business)

• The obligee (e.g., a property owner, developer or project owner)

• The surety (e.g., an insurance company)

Surety bonds establish and maintain financial security and peace of mind by offering a way for the obligee, such as your client or customer, to recover losses if you cannot fulfill your contractual duties. In these situations, the surety bonds you’ve purchased can provide compensation without requiring them to take you to court, which could lead to an ongoing legal battle and far greater total costs. This can also decrease reputational harm, as such lawsuits could become highly public, potentially leading to your company’s name being dragged through the mud and impacting its future prospects.

What Are the Different Types of Surety Bonds?

Surety bonds may come in many forms, each offering financial protection in accordance with the needs of various businesses. Specifically, the following types of surety bonds may be commonly purchased:

• Commercial bonds

• Contract bonds

• Performance bonds

• Bid bonds

• License and permit bonds

• Maintenance bonds

• Auto dealer bonds

• Mortgage broker bonds

• Court bonds

• Construction bonds

How Do I Get Surety Bonds?

Contact Area Insurance Services today to learn about surety bonds and ensure you have adequate loss control measures.