How Do You Use Surety & Indemnity Bonds?
There are several different types of bonds. The type is generally dependent on the issuer and the use. The most common type of bond is the surety and indemnity bond. These bonds are primarily used by small government and municipalities to borrow money for future civic projects or by contractors who are bidding on a particular project. In both cases, the objective is provide insurance. Identify your needs. Understand what you need the surety bond for and try to make an estimate of the costs incurred. Create a request for a proposal (RFP) for interested contractors to submit estimates. This is from the perspective of the municipality. The goal of requiring a surety or indemnity bond is to find out as much information as possible about the contractor and safeguard the project from projects. Pick an indemnitor with low rates. From a contractor’s perspective you want a surety/indemnity bond company that charges the lower premium. This creates savings for the contractor. Contact your insuran
