Skip to ContentSkip to Footer

Surety Bonds

Man signing a document in the presence of others.

Surety bonds are required in practically every profession in the U.S. There are many different types of surety bonds, but all are essentially an agreement between three parties:

  • Principal: the person required to post a bond;
  • Obligee: the person or entity requiring the principal to be bonded; and
  • Surety: the institution providing a financial guarantee to the obligee on behalf of the principal.

If the principal fails to meet his or her obligations to the obligee – which could mean anything from complying with certain laws and regulations pertaining to a business license to meeting the terms of a specific contract – the surety may have to pay a claim to the obligee. A surety bond is a risk transfer mechanism and a legally binding contract.

Benefits of Surety Bonds

Surety bonds are purchased by a principal because they are required, either by a government entity or as a condition of a contract. However, these bonds provide benefits for the principal as well. They are a cost-effective alternative to posting cash directly with a trustee or the obligee or providing an irrevocable Letter of Credit in lieu of a surety bond.

As the principal, you pay a small percentage of the bond amount to the bonding company (surety) to provide a guarantee to the obligee, rather than parting with your liquid cash. Basically, when you purchase a surety bond, it is a form of credit extended to you.

The cost of a surety bond is based on three factors:

  • Type of surety bond
  • Amount of the bond
  • The risk level of the applicant

If you need a surety bond for professional purposes, contact our agent at Gaddis Insurance Agency in Athens, Tennessee, for a quote.

Get A Quote

* indicates required fields

This field is for validation purposes and should be left unchanged.

Customer Reviews

Donnie is a great agent who gets the best for his customers

LF
Linda F

I have had insurance with this company for 12 years

RS
Reuel S

Very pleasant to do business with

TT
Tamara T

They are very kind & considerate

CS
Chas S
5/5

Donnie Gaddis...and his staff are top notch.

JP
John P
Specializing In ERIE Insurance
Get an Auto Quote
Get an Auto Quote
Pay Your Bill
Pay Your Bill
Life Insurance Calculator
Life Insurance Calculator
Access Online Account
Access Online Account