Surety Bond Overview & FAQs

Frequently Asked Questions:

What is a bond?

  • Essentially, a bond is a three-way promise among the Obligee (the party who benefits from the bond), the Principal (the party who has an obligation to the obligee), and the Surety (the party who backs the principal's obligation).
    Return to Top

When are bonds most effective?

  • When a loss is a direct result of a Principal’s failure to meet an obligation and the Obligee’s loss can be measured in actual dollars.
  • When the potential exposure to the Surety is sufficient that the Surety underwrites the case and doesn’t just process it. The prequalification of applicants is one of the important services provided by the Surety.
  • When the possibility of a claim being made against the Principal’s bond is real enough to cause the Principal to exercise a greater level of caution than he or she might absent the bond.
    Return to Top

What types of bonds are most helpful?

  • Contract Bonds: On most construction projects, federal and state laws require contractors to be bonded, ensuring the obligee that the surety has thoroughly analyzed both the contractor and the job and has viewed the contractor as qualified to do the work.
  • Off-Site Improvement Bonds: Also known as "subdivision bonds," these bonds guarantee the placement of public improvements on privately owned projects, assuring the local government that owners of a building or housing subdivision have installed all of the required improvements.
  • Excavation Permit Bonds: Provides the public entity assurance that when a contractor or property owner receives a permit to excavate in a public right-of-way that they’ll restore the right-of-way to its original condition.
    Return to Top

Where can I find more information about bonds and sureties?

Moreton Advantage

  • » Wide Representation:
    We represent major surety companies given an A-rating by A.M. Best Company, allowing us to handle your needs, regardless of size, complexity or location.
  • » Proactive Approach:
    We are proactive in selecting the right surety company for your needs, and in negotiating rates, terms, and conditions.
  • » Dedicated Team:
    Moreton employs a team of dedicated surety professionals who will give high priority to your account at every turn.