An entity that requires bonding needs to pay premiums to cover potential losses from any future accidents that may happen during their term of coverage.

Insurance companies exist to assure reduction of possible risks. It means having enough funds available when needed to handle expenses incurred by contract breach or failure of compliance.

Northwest Insurance Agency offers surety bonds in Dallas and surrounding areas to protect you from losses due to non-performance or default. We’ve been providing this service since 1970 and know what matters most for you: reliability, efficiency, and customer care!

How surety bonds cover financial losses

Surety bonds work in the same way as insurance policies. It’s just that instead of insuring against damages and injuries, you’re insuring against the financial consequences of a breach of contract. A surety bond is an agreement between three parties:

  • Obligee. It is the entity that would suffer from the damage caused by the other’s failure to comply.

  • Obligor or principal. This party agrees, usually as a condition for legal privilege such as being licensed in a particular profession.
  • Surety company. This entity provides the money for the bond when the obligor requires payment for damage caused by neglecting their obligation.

The benefits of surety bonding include:

  • Decreased financial risk for projects and contracts
  • Minimized exposure to liability lawsuits
  • Increased assurance of completion on time and within budget
  • Assurance that work will adhere to specifications outlined by the obligee (client)
  • Protection from fraud, with penalties including fines up to $250k per violation AND imprisonment up to five years.

Types of Surety Bonds

Some bonds protect people from fraud or dishonesty in the workplace, while others intend to guard against money loss. These are the different types of surety bonds, and we recommend each for various purposes.

  • Bid bonds. They are used to guarantee that the contractor will be able to complete a construction contract.

  • Performance bonds. It’s there to protect you if your vendor doesn’t live up to his obligations and complete the job according to contract specifications.

  • Payment bonds. They ensure that the obligor will complete all work satisfactorily before any funds change hands between contractor and owner.

  • License and permit bonds. It protects consumers from the financial impact of an underperforming professional with a valid license or certification.

  • Employee theft bonds. They provide a financial guard against dishonest acts committed by people who can access property that belongs to their employers.

Securing successful contracts in Dallas since 1970

Northwest Insurance Agency has a team of agents on staff knowledgeable about the risks and needs of small businesses. We provide competitive prices, cutting the times and costs of your projects. We also offer other insurance services so that Texas business owners can guarantee risk management policies.

Surety bonds are fast and easy when we do them. If you need bonding services for your project or business, contact Northwest Insurance Agency today!

Get a personal consultation.