What is a Surety Bond?
A surety bond is defined as a three-party agreement that legally binds together a
principal who needs the bond, an obligee who requires the bond and a surety company
that sells the bond.
CCAF Insurance provides Surety Bonds as part of its Commercial insurance
coverage.
Types of Surety Bonds
There are many different types of surety bonds. In fact, almost any contract
or obligation can be bonded. However, the 4 most common types of surety bonds
include contract surety bonds, commercial surety bonds, court surety bonds,
and fidelity surety bonds.
Contract Surety Bond
A contract surety bond guarantees that a contractor will follow the specifications
laid out in a construction contract.
Commercial Surety Bond
A commercial surety bond is typically used to protect public interests and are
usually mandated by government agencies.
Fidelity Surety Bond
A fidelity bond protects a company against the malpractice of an employee who
handles cash and other valuable assets.
Court Surety Bond
A court surety bond can be required by an attorney or similar entity before a
court proceeding to ensure protection from a possible loss.
In Alberta a bond is required for licensing under the following business types:
- Sales Business
- Collection Agency
- Direct Sellers
- Debt Repayment Agency
- Electricity Marketers
- Employment Agency
- High-cost Credit
- Home Inspection Business
- Natural Gas Marketers
- Payday Lender
- Prepaid Contractors
- Retail Home Sales
- Time Shares & Points-Based Contracts
- Fund-Raising Business