Bid bonds are a fact of life for contractors. Basically all public sector projects require contractors to have this type of surety bond before they’re allowed to submit a bid for work, and many private sector projects have the same requirement. Bid bonds hold a contractor financially responsible if they’re awarded a work contract but don’t accept the job. Developers and project owners use bid bonds as a way to discourage contractors from submitting bids they can’t or won’t fulfill, wasting valuable time and resources in the process.
Performance bonds are a type of surety bond that help contractors manage risks and make sure the job is done right. In 2750 BC, the pioneering historian Herodotus reported the use of performance bond agreements as a form of surety. Today, across public and private sectors alike, performance bonds are used by owners to ensure that contractors are up to the task. The extra security that a surety bond offers is an important part of a successful project.
The COVID-19 pandemic has affected every single industry, including surety bonds. That doesn’t come as much surprise considering that surety bonds are weaved into the fabric of the broader economy. Many professionals and businesses need them to operate legally, and most contracts aren’t complete until bonds are in place. When the outbreak of a global pandemic causes business activity across states and sectors to take an unprecedented plunge, one would only expect the surety bond industry to feel the impact.
What’s a court bond? It’s a way for courts to hold defendants and plaintiffs accountable for paying financial judgments. When courts require someone to pay and they either can’t or won’t, the person they’re responsible for paying may file a claim against the surety bond. The surety company backing the bond will pay for all valid claims, and then they will collect the amount of the claim (plus interest and fees) from the original bond holder. For the bond holder (known as the principal) court bonds work like a line of credit. And for the beneficiary of the bond (known as the obligee) bonds guarantee they will receive the damages they are owed.
Some veterans require assistance to administer their Veteran’s Administration (VA) benefits. The fiduciary who provides that assistance has an important and sensitive job as the custodian of large sums of money that are critical to the veteran’s care and wellbeing. When VA benefits exceed $20,000, someone must obtain a VA fiduciary bond before they’re allowed to serve as a fiduciary. This is your comprehensive guide to those surety bonds.
When a creditor takes a borrower to court because of an unpaid debt, the creditor may seek what’s known as a garnishment. A garnishment gives the creditor the right to withhold a portion of the debtor’s wages from their employer or assets from their bank account until the amount of the debt is recouped. However, before granting that garnishment, the courts will usually require the creditor to prove they have a garnishment bond, which is a type of surety bond. This article outlines 7 things you need to know:
Across the country, major construction projects plan to either break ground or enter a major new phase over the course of 2020. The COVID-19 pandemic caught everyone off guard and forced some projects to delay or reconfigure. Nonetheless, there are still projects planning to move forward and working to put all the necessary plans and preparations in place before the end of the year – including securing any construction bonds necessary. Here are a few of the notable projects worth following along with:
If you intend to serve as a trustee, you may need to obtain a trustee bond first. Here are some important things you need to know upfront:
Before we answer questions about trustee bonds – one particular kind of surety bond – we should explain some of the terms and concepts involved. First, a trust is a financial vehicle set up during a person’s lifetime or after it as part of their will. Trusts contain funds which are distributed to particular persons or organizations based on terms dictated by whoever established and funded the trust. With a few exceptions, trusts can operate however someone intends.
To answer that question, you need to understand how this particular kind of surety bond works, why the courts require one, and how it affects the parties involved. This piece explores the ins and outs.