How BOSS Bonds Can Improve Your Bottom Line

Your Advantage with BOSS Bonds

Getting the bonds you need shouldn't be hard. Whether it's a popular surety bond or a rare regional one, we have over a thousand bonds readily available. You can rely on the expertise of BOSS Bonds by your side.

We Focus on You

What sets BOSS Bonds apart is our strong focus on our clients—and our clients alone. We concentrate solely on surety bonds to ensure your customers remain exclusively yours.

Because of this unique approach, we’ve become masters of our trade, gaining decades of experience in the surety market. Our goal is to ensure that your bonding experience is smooth and always optimized for success. You have our undivided attention, specialized support, and a commitment to building strong partnerships.‍

Get Everything You Need with Our Exclusive Portal

A common complaint with clients across several bonding agencies is how difficult it is to manage bonds and understand them, especially at a glance.

The good news is we have it all figured out. We solved this long-standing problem with our SuretyBonds.Market (SBM) portal. Our easy-to-use portal provides 100% transparency and control throughout each bonding stage, from your application and approval to its issuance.

The hassle of dealing with commission checks or not knowing which customers got which bonds is completely over. You also have direct communication channels with our team. Through the SBM portal, you can monitor your client's bond with ease.

The Best Service with the Most Competitive Rates

BOSS Bonds has a strong nationwide network across all 50 states. We know which sureties to approach with the best rates for different bonds, so you can enjoy a quicker turnaround because we don't waste time placing bonds in the wrong markets.

Additionally, if you need a bond that doesn’t require a credit check, our in-house authority helps expedite the process for your convenience.

We've built our business on relationships established in over 25 markets to give you a competitive advantage.

Bonding Basics Explained

It's time to offer surety bonds to your customers and grow your bottom line.

If you're not yet familiar, surety bonds are a three-party agreement between the principal, the obligee, and the surety company. The obligee requires the principal to post the surety bond. Meanwhile, the surety company is the entity that bears the financial liability originally placed on the obligee if the principal acts negligently.

Regardless of the type of surety bond, they are not an insurance policy. A surety bond does not protect the principal because the principal is ultimately responsible for reimbursing the surety for any valid claims paid out.

Surety bonds are categorized into two types:

• Contract bonds
• Commercial bonds

We'll discuss each of these in detail in the coming sections. In short, commercial bonds are commonly needed as a licensing requirement for businesses, while contract bonds are needed within the construction industry.

Commercial vs. Contract Bonds

What are Contract Bonds?

A contract bond is a required agreement between the general contractor and the project owner for both public and private construction projects. While there are also less common contract bonds for commercial projects like security and janitorial services, we will be focusing solely on the construction industry here.

How Do Contract Bonds Work?

With a contract bond, there's a guarantee that the contractor will fulfill their duties as agreed. Sometimes, a contractor uses faulty materials, doesn't finish their project, or fails to pay their suppliers and subcontractors.

In these cases, the injured party (usually the project owner) can file a claim against the contractor’s surety bond to recover from the damages that the contractor has caused. And, because this is not an insurance policy, the contractor is still ultimately financially liable for any valid claims.

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Types of Contract Bonds

There are four primary types of contract bonds: namely bid bonds, payment bonds, performance bonds, and maintenance bonds.

Bid Bonds

As the name implies, a contractor will need a bid bond when bidding on a construction project. This type of contract bond guarantees that the bidder is committed to the contract, has agreed on the quoted price, and will provide the necessary performance and payment bonds after being awarded the project.

To prevent delays in a project, this bond ensures contractors don't place unrealistic bids just to win a project and then back out later.

Payment Bonds

Payment bonds are a type of contract bond that safeguards the subcontractors and suppliers that will work with the general contractor on the project. This ensures subcontractors and suppliers are paid for their work in a timely manner.

With this bond, subcontractors and suppliers receive protection from any potential financial losses if the contractor does not or is not able to pay them (e.g. bankruptcy or other reasons).

Performance Bonds

Usually issued in conjunction with the payment bond, a performance bond makes sure that the contractor will perform the work as specified in the contract and within the set deadline.

If the contractor fails to meet the target date, project owners can rely on the performance bond for financial protection. This will cover the additional costs required to finish the project.

Maintenance Bonds

Also known as warranty bonds or guarantee bonds, maintenance bonds protect the obligee from any issues that the completed project might encounter over a specific period of time after its completion.

When a problem occurs, the contractor receives the chance to correct the defects, or the surety company will step in to ensure the problem is fixed. This bond is usually a requirement issued by government agencies but can also be requested by owners of private projects.

While a maintenance bond policy is already often included as part of a performance bond, this can still be issued separately.

Remember, any time the surety company must step in to complete, correct, or finance part of the project, the principal on the bond will be financially liable for reimbursing the surety for the claim and any additional fees and expenses incurred by the surety that exceed the bond amount.

What are Commercial Surety Bonds?

The reach of commercial surety bonds goes far and wide. But they're generally divided into five main types:

• License and Permit Bonds
• Court Bonds (also called Judicial Bonds)
• Fiduciary Bonds (also called Probate Bonds)
• Public Official Bonds
• Miscellaneous Bonds (any bond that doesn’t belong to the other categories (eg. Tax and utility bonds)

Commercial surety bonds can be required by federal, state, and local governments because they ensure compliance with various laws and regulations. As an agent, you'll most often encounter requests for License and Permit Bonds because commercial bonds like these are needed as licensing requirements to operate as motor vehicle dealers or state-licensed contractors.

How Do Commercial Surety Bonds Work?

Here's an example of a commercial bond in action: general contractors in California need to be licensed by the California Contractors State License Board (CSLB), and one of their licensing requirements is to obtain a CA Contractor License Bond (CLB). This commercial surety bond is needed so that the contractor follows state laws and licensing regulations.

If the California contractor fails to follow the law, the injured party can file a claim against the contractor's bond to recover damages. And as mentioned, unlike insurance, the principal is still responsible reimbursing the surety for all valid claims, plus additional fees and expenses.

Bonding Solutions Made Easy with BOSS Bonds

With BOSS Bonds, you get access to expertise in both contract and commercial surety across all 50 states. Bonding processes are hassle-free with our intuitive SBM portal, and you have our expansive network right at your fingertips for easy commission.

Now that you can see the potential of surety bonds to improve your bottom line, it's never been this easy to take the first step with BOSS Bonds.

Provide your clients with the best surety bonding solutions available right now. Connect with us at info@bossbonds.com!

We're excited to partner with you to deliver a transformative approach to surety bonding. Get started today!