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Bonds Information

 Companies Offering Surety Bonds

 Auto-Owners Insurance



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Auto-Owners Insurance

What is a Surety Bond?

Webster's dictionary defines a Surety Bond as "a bond guaranteeing performance of a contract or obligation." That simple definition is at the base of a specialized and detailed series of agreements with roots as old as civilization.

Where do Surety Bonds come from?

The original Surety guarantee was by individuals, one friend stood surety for another. This type of personal surety guarantee is totally inadequate to meet the needs of the modern world. For over one hundred years, corporate Surety companies have provided a wide range of Surety bond guarantees. Although Surety bonds are generally written by insurance companies and are regulated by state insurance departments, surety bonds are not insurance. Surety bonds more closely resemble loan guarantees given by banks.

How does a Surety Bond work?

A Surety bond is a guarantee involving three parties, the Principal is the person or business with an obligation to perform. The Obligee is the person, company or governmental unit requiring the guarantee. The Surety company provides the bond to guarantee that the Principal fulfils their obligation to the Obligee. As long as the Principal performs their obligation the Surety company has no role. The best Surety bond situation is when the Principal fulfils their obligation, the Obligee is satisfied and the Surety company takes no part in fulfilling those obligations. If the Principal does not do what is required, the Surety company has to meet the obligations. If this happens, the Surety company is entitled to be reimbursed for losses and costs by the Principal. Before a bond is written, the Surety company will require the Principal to provide an indemnity agreement from the business and also the personal indemnity of the Principal.

Why do we need to have Surety Bonds?

Surety bonds are a risk transfer mechanism. The risk of the Principal performing their obligation is shifted from the Obligee to the Surety company. Federal, state and local governments may require bonds to guarantee that the Principal will comply with various laws or pay taxes. Contract bonds, protect the taxpayers money by guaranteeing that projects are awarded to the lowest bidder. Judicial and public official bonds all help to protect and secure public funds and private interests.

How do I get a Surety Bond?

You may submit completed applications to your bond underwriter in the Home Office in the Special Lines Underwriting department. You may call them or send an e-mail at the numbers listed on the roster. The more you can tell us about the applicant and their needs, the more quickly the bond can be issued. Brochures, business plans and resumes of owners are information sources that assure timely turnaround of the bond. Additionally, you can issue most bonds directly from your own office if you have a "Power of Attorney" from Auto-Owners. Contact your bond underwriter or Marketing Representative to find out more about obtaining a Power of Attorney.

What are the different types of bonds?

There are thousands of bond requirements, each covering a different obligation. The following are the major classes of Surety Bonds.

Judicial bonds

These bonds are a guarantee that the Principal will comply with the instructions of the court. These may be probate or court bonds.

Court bonds

Bond Application - form 29153 can be used for Court Bonds. Complete the top of the application and the Court Bonds other than Probate section along with the signatures indicated on the back of the application. A copy of the court papers will be needed. Either complete the financial statement information on the back of the application or provide a separately prepared statement.

Court Bond Application - form 2972 is used for Court Bonds such as Sheriff's Indemnity, Plaintiff's Replevin or Supersedeas bonds that may require a more lengthy explanation. A copy of the court papers and a financial statement are required.

Probate bonds

Bond Application - form 29153 can be used for Probate Bonds by completing the top of the application and the Probate section along with the signatures needed as indicated on the back of the application. In some cases, a copy of the will or court appointed papers may be required.

Pre-executed Probate Bond forms are used in many states to issue Probate Bonds in your office up to limits of $600,000 without application.

Public Official Bonds

Guarantee that a public official will serve their elected or appointed office properly.

Bond Application - form 29153 is used for most Public Official Bonds. Complete the top of the form and the Public Official section along with the signatures needed as indicated on the back of the application.

Pre-executed Notary Bond forms are used in various states for Notary Bonds. These forms have the Notary Bond form required by each state and a Notary Errors and Omissions Policy.

License and Permit Bonds

Guarantee that an individual or business granted a license or permit to operate a business or to exercise a privilege will meet their obligations under the law.

Bond Application - form 29153 is the form used for most License Bonds. Complete the top of the form and the License and Permit section along with the signatures needed as indicated on the back of the application.

Vehicle Dealer Bond Application - form 29166 is used for Vehicle Dealer Bond requirements in many states. In order to apply for this bond, you only need the completed application and the bond form required by the state.

Pre-executed License Bond forms are used for bond requirements of local governments for bonds up to $25,000. Since most bonds required by state governments are on their own forms, the pre-executed bonds were not designed for those bond requirements.

Contract Bonds

Guarantee that the Principal awarded a contract will complete their work and pay their bills during that contract.

Contract Bond Application - form 2920 can be used to apply for a specific contract. The entire application must be completed, signed and dated.

Miscellaneous Bonds

Guarantee a variety of obligations not classified elsewhere, including travel agency bonds and lost instrument bonds among others.

Bond Application - form 29153 is used to apply for a Miscellaneous Bond. Complete the top of the application, the Miscellaneous Bond section, and the Financial Statement section. If applying for a Lost Instrument or Lost Securities Bond, complete the Lost Securities Bond section.

Employee Dishonesty and Forgery Coverage

An Employee Dishonesty policy covers the business for loss of money, securities and other property for theft by an employee.

Fidelity and Forgery Coverage Application - form 29176 is used to apply for Blanket or Scheduled Employee Dishonesty Coverage and also for Forgery Coverage. No individual applications are required for Blanket Employee Dishonesty Coverage. For Scheduled Employee Dishonesty Coverage, each person named in the schedule or occupying a position shown on the schedule must complete the Schedule Fidelity Bond section of Bond Application - form 29176

Welfare and Pension Plan Bond Application - form 29158 is used when the applicant needs Employee Dishonesty Coverage to cover an employee benefit plan per federal statues. No other application is required for either Blanket or Scheduled Employee Dishonesty Coverage for Welfare and Pension Plans.


What Is A Surety Bond?

Surety bonds are designed to guarantee performance in the face of a set of particular risks. Each surety bond must be uniquely tailored to meet specific needs.

A surety bond is an agreement under which one party, the surety, guarantees to another party, the obligee, the performance of an obligation by a third party, the principal.

The three most common types of surety bonds include:

Contract Surety
Bonds that the government or an owner of a construction project may require a contractor to obtain. There are three types of contract surety bonds:
Bid bond - Affords protection to a project owner (obligee) in the event a successful bidder will not enter a contract and will not provide the required surety bonds or other security
Performance bond - Provides protection to the obligee if the contractor defaults on its obligations under the bonded contract
Payment bond - Guarantees that the contractor will pay subcontractor, labor and material bills associated with the construction project.

Special Risk
Coverages for the securities industry.

Commercial Surety
Bonds required of individuals or businesses by the government, legislation or by other entities. Travelers Bond & Financial Products  provides the following types of commercial surety bonds
License and permit bonds: required by state, municipal or federal ordinance or regulation. These bonds may be required as a condition for engaging in a particular business or exercising a particular privilege. Examples include performance and payment bonds, customs bonds, tax bonds and warehouse bonds.

  • Court bonds, including: 
  • Judicial bonds, required of either a plaintiff or defendant in judicial proceedings, to reserve the rights of the opposing litigant or other interested parties
  • Fiduciary bonds, required of those who administer a trust under court supervision.
  • Public official bonds: required by statute for certain holders of public office, to protect the public from malfeasance by an official or from an official's failure to faithfully perform duties.
  • Miscellaneous bonds: do not fit into any of the other categories above.

    Travelers bond & financial products construction services

    For over 100 years, Travelers Bond & Financial Products has enjoyed a rich heritage as a leader in the surety industry.  Our Underwriting professionals are strategically located in over 50 Field Offices countrywide and are supported by a Home Office team dedicated to Construction.  Our financial resources allow us to deliver the capacity our clients need for large work program commitments and the smallest clients in the industry.

    Value proposition

    • Integrity – Fair dealing and doing what we say.
    • Stability – Consistency, reliability, and adherence to a long- term, profitable strategy.
    • Capacity – Financial strength, ratings, and commitment to support accounts of all sizes.
    • Expertise – Professionalism, knowledge, and experience.  Serving as a trusted advisor by providing distinct value.
    • Superior Service – Local, prompt, and reliable.
    • Lasting Relationships – Understanding and satisfying customer’s needs.  Supporting strategic partner’s ability to grow.

    Types of bonds

    • Bid
    • Performance and Payment
    • Release of lien
    • License and permit
    • Supply
    • Miscellaneous

    Target markets

    • General contractors and construction managers
    • Prime subcontractor trades, mechanical and electrical
    • Road, bridge, and paving contractors
    • Underground utility contractors
    • Emerging/small to large national contractors

    Additional product segments


    CNA Surety provides commercial and contract surety bonds in all 50 states through a combined network of over 37,000 independent agencies.

    The Commercial surety market includes numerous types of bonds categorized as court judicial, court fiduciary, public official, license and permit, and many miscellaneous bonds that include guarantees of financial performance.

    CNA Surety Companies also write fidelity bonds, which cover losses arising from employee dishonesty and Errors & Omissions liability insurance.

    Contract bonds guarantee the performance of obligations covered by a written agreement between two parties. The most common types include bid, performance and payment bonds.


    Bonds Quote Forms

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