What is Commercial Surety?
Bonds which are required to satisfy or guarantee fiduciary obligations, governmental legislation, as well as private contractual obligations of the applicant or the Principal under the bond. Bonds sold to companies and individuals in order to satisfy government regulations and court orders, or to replace lost documents such as share certificates. Commercial Surety Products include bonds which respond to federal and/or provincial statutes and regulations. They are usually part of licensing processes and requirements for companies or individuals.
Commercial Surety Bonds protect the consumer against fraud, misrepresentation, and compensation of monetary loss and are typically required by federal and/or provincial courts, government bodies, financial institutions, and private corporations.
Commercial Surety can be classified in the following categories:
- Fiduciary & Estate Bonds
- Custom & Excise Bonds
- Licence and Permit Bonds
- Lost Instrument Bonds
- Carnet Bonds
Five Things You Should Know About Commercial Surety
- Commercial Surety Bonds can be used to guarantee performance of non-construction related contractual obligations.
- Commercial Surety Bonds can replace letters of credit. They are generally more cost effective and they do not require the principal to post collateral as security.
- Commercial Surety Bonds are usually priced between 0.5% and 3% of the bond obligation.
- Commercial Surety Bond premiums and bond wordings are typically standardized.
- Commercial Surety Bonds are becoming more commonly used by private owners to secure contractual obligations.