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In the simplest terms, a bond is a guarantee. What the bond guarantees varies depending on the language of the bond. It is a form of credit, not insurance. Bond premiums vary greatly depending on the applicant, the bond type, surety, and the obligee. Just like other forms of credit, everyone does not receive the same rate.
At Eastern Insurors, we have established relationships with numerous bonding insurance companies. In most instance we have been given “Power of Attorney” with these companies, allowing us to issue your bond immediately at our office.
At Eastern Insurors, we can find a company to provide you with the bond you need. Following are a few of the bond types that we can provide.
Bid & Performance Bond
Bid and performance bonds provide financial security and construction assurance on building and construction projects by assuring the project owner (obligee) that the contractor (principal) will perform the work and pay certain subcontractors, laborers, and material suppliers.
A bid bond is a guarantee that the bonding company will provide a performance bond to the principal, if they are awarded the contract. A claim can arise if the bonding company refuses to write the performance bond, which is why the surety will underwrite bid bonds with the same caution as they do for performance bonds. In other words, the surety will not approve a bid bond, if they are not going to approve the performance bond.
Site Improvement & Subdivision Bond
Site Improvement — Site improvement bonds guarantee that public property effected by private improvements will be upgraded as required by the government authority. They differ from a subdivision bond in that they are for improvements to an existing building where subdivision bonds are required for new structures.
Subdivision — Mandatory public improvements that builders, developers, and individual landowners make to their property. The local authorities require a guarantee that the landowner completes the improvements. A subdivision bond obligates the principal and the surety to complete subdivision improvements.
License & Permit Bond
A license & permit bond is a sub-category of bond types. They fall under the commercial category of bonds and guarantee the principal will abide by the terms of the license they file the bond for. Some of the most popular license & permit bonds are auto dealer bonds, contractor license bonds, mortgage lender bond, and mortgage broker bonds, etc.
Appeal Bond — A bond required by a court prior to an appeal. Appeal bonds always require 100% collateral.
Custodian Bond — Another term used for guardianship bonds. A custodian or guardianship bond ensures that the legal guardian of a disabled individual or minor will properly administer the individuals assets.
Estate Bond — An estate bond is another way to describe a probate bond, fiduciary bond, or executor bond. It is required by the court and guarantees the fiduciaries' responsibilities of properly allocating the deceased or incapacitated individual's estate.
Executor Bond — An estate bond is another way to describe a probate bond, fiduciary bond, or executor bond. The bond is a promise required by the court that the executor will distribute all estate assets as instructed.
Fiduciary Bond — An estate bond is another way to describe a probate bond, fiduciary bond, or executor bond. It's a court ordered bond that promises the executor of the estate will correctly distribute the assets of the incapacitated or deceased.
Guardianship Bond — Guarantees that the legal guardian of a minor or an individual that is uncompensated will appropriately manage the individuals finances. Also known as a custodian bond, a guardianship bond guarantees the legal guardian's performance in administrating a disabled individual or minor's finances.
Probate Bond — Required by the court in order to ensure the executor of an estate properly distributes the assets as the deceased or incapacitated. Probate bonds are the same as fiduciary bonds, executor bonds, and estate bonds. They are all mandated by the court system and provide security in promising the executor of the estate will perform in a proper manor when allocating the assets of the deceased or disabled individual.