Surety / Bonding

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• BASIC EXPLANATION OF BONDING
• TYPES OF CONTRACT BOND
• TYPES OF COMMERCIAL BOND
• SURETY SOURCES
• OTHER RESOURCES
  

Basic explanation of bonding

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A bond is a promise by a third party (the Surety) to pay - or sometimes perform - if a contractor fails to complete a contract. A bond can also help protect an owner from liens against the owner's property if the contractor fails to pay workers or suppliers.

A bond is a three-way contract. The Surety is almost always a licensed insurance company, although a private person can on some occasions act as Surety. The contractor is called the Principal because the contract is his or her primary responsibility. The Surety and Principal promise, in the bond, that the contract will be performed according to its terms. Essentially, the Surety promises that if the contract is not performed, it will pay damages if the Principal cannot.

The Obligee or Beneficiary benefits from the promise described in the bond. The Principal and Surety both sign the bond; the Obligee does not. Nevertheless, the Obligee also has obligations under the bond. If the Obligee does not perform his or her own obligations under the contract, neither the Principal nor the Surety is bound. The bond is not an insurance policy. It merely provides an extra level of financial resource behind the contractor, a place to turn if the contractor cannot meet contractual obligations through his or her own assets.

Types of Contract Bond

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Bid Bond
Consent of Surety / Agreement to bond
Performance bond
Supply bond
Labour & material payment bond
Maintenance Bond
Lien Bond / Release of Lien Bond

Types of Commercial Bond

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Administration Bond
A.T.A Carnet Bond
Administrator De Bonis
Administrator Pendente Lite
Administrator With Will Annexed Bond
Agricultural Products Bond
Air Charter Bond
Appeal Bond
Appeal Customs Bond
Auctioneer Bond
Automobile Vehicle Registration Bond
Bailiffs Bond
Bonded Air Carrier
Bonded Freight Forwarder
Bonded Highway Carrier
Charitable Promotion Bond
Collection Agency Bond
Committee Bond
Consumer Protection Act Bond
Contractor's Licence Bond
Court Bonds
Customs Bonded Warehouse
Customs Brokers Licence Bond
Customs Sufferance Warehouse Bond
Denatured Alcohol Bond
Direct Sellers Bond
Driver Training School Bond
Duty-Free Shop Bond
Electricity Bill Payment Bond
Employment Agency Bond
Excise Tax Act Bonds
Foreign Executor Bond
Farm Machinery Bond
Fuel Tax Bond
Gas Contractor's Bond
General Excise Carrier Bond
Goods & Services Tax Bond
Guardian Bond
Grain Bond
Health Studio Bond
Highway Traffic Act Bond
Lease Agreement Bond
Livestock Dealers & Products Bond
Load Broker Bond
Lost Instrument Bonds
Lottery Bond
Market Intermediaries In Damage Insurance Bond
Milk Board Bond
Missing Heir Bond
Mortgage Brokers Bond
Nonresident G.S.T. Bond
Payment Guarantee Bond
Plumber's Bond
Pre-Arrangement Funeral Service Act Bond
Private Investigator & Security
Private Vocational School Bond
Probate Bonds
Real Estate Broker Bonds
Release Of Goods Bond
Replevin Bond
Road Cut Permit Bond
Roofing Contractors Bond
Sand Pit Bond
Securities Act Surety Bond
Sewertappers Bond
Single Trip Customs Bonds
Solid Waste Management Bond
Sub-Division Bond
Temporary Importation Of Articles Bond
Tobacco Sales Tax Bond
Transponder Bond
Travel Agents Bond
Trustee In Bankruptcy Bond
Used Car Dealer Bond
Waiver Of Probate Bond

Surety Sources

(General - Not necessarily accessible by TCIM)

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• Berkley Canada
• CNA Surety
• Contractors Bonding & Insurance Company
• E-Surety.net
• Insurors Indemnity Company
• Intact insurance Company
• The Guarantee Company of North America - GCNA - The Guarantee Company of North America is a Canadian owned property and casualty insurance company which has been serving the insurance needs of Canadians for over 130 years.
• Trans Canada Insurance Marketing Inc.
• Travelers
• Trisura Guarantee Insurance Company

Other Resources

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• Canadian Construction Documents Committee (CCDC)
• National Association of Surety Bond Producers
• Surety Association of America
• Surety Association of Canada
• Surety Bond Glossary - from bondexpress.com
• Surety Information Office