Taylor Agency

A bond guarantees the performance of a contract or other obligation. Bonds are three party instruments by which the surety guarantees the obligee the successful performance of the principal.

The Surety: Usually a corporation which determines if an applicant (principal) is qualified to be bonded for the performance of some act or service. If so, the surety issues the bond. If the bonded individual does not perform as promised, the surety performs the obligation or pays for damages for which they are liable under the terms of the bond. The purpose of a surety is to protect public and private interest against financial loss.
The Principal: An individual, partnership, or corporation who offers an action or service and is required to post a bond. Once bonded, the surety guarantees that he will perform as promised.
The Obligee: An individual, partnership, corporation, or a government entity which requires the guarantee that an action or service will be performed. If not properly performed, the surety pays the obligee for any damages or fulfills the obligation.

Bid Bonds: Bid Bonds guarantee that a contractor will enter into a contract at the amount bid. When he does this, the bid bond is released.
Contract/Performance Bonds: Performance Bonds guarantee the performance of the terms of a contract. The requirement of a performance bond, in addition to the screening process by the surety, eliminates unqualified contractors before the bidding process begins.
License & Permit Bonds: Many public entities require certain occupations and practices be bonded to protect the public. The bond guarantees that the individual will comply with the ordinances governing that practice. These bonds are designed to protect the public and help regulate certain industries.
Court (Judicial) Bonds: Court bonds are usually required in the course of some action of law. The two types of court bonds are plaintiff and defendant.
Plaintiff Bonds: Plaintiff bonds are required of a plaintiff in an action of law. They generally guarantee damages to the defendant caused by the plaintiff's legal action, if the court should ultimately decide for the defendant.
Defendant Bonds: Defendant bonds counteract the effect of the bond that the plaintiff has furnished. Generally speaking, these bonds have proven to be more hazardous than plaintiffs bonds. Many times they can only be written with the posting of adequate collateral to protect the surety from loss.
Fiduciary Bonds: A fiduciary is a person appointed by the court to handle the affairs of persons who are not able to do so themselves. An Administrator is a fiduciary who handles the affairs of someone who has died; he or she is known as an Executor if specifically named in the will. Another common type of fiduciary is a Guardian or Conservator who handles the affairs of a minor or an incapacitated person. Fiduciaries are oftentimes asked to furnish a bond to guarantee faithful performance of their duties. Statutes prescribe how fiduciaries should handle others' affairs.
Notary Public Bonds: This bond guarantees that the notary public will faithfully perform duties as prescribed by the laws in their jurisdiction. These bonds are for the protection of the public. As a notary, you are acting as a public official appointed by your state or county. However, this bond does not provide any protection for you as a notary if you make a mistake! You may be personally vulnerable to lawsuits if you make a mistake. Notary Public Errors and Omission coverage will provide protection for this type of exposure.

i. Blanket Fidelity Bonds

Blanket Position Bond: Covers each employee to the amount stated on the bond. The amount of coverage is applied separately to each covered employee. The maximum coverage is the amount of coverage stated on the bond multiplied by the number of employees involved in the loss.
Commercial Blanket Bond: Provides a single amount of coverage caused by dishonest acts of employees, regardless of the number of employees involved in the loss. In other words, this type of bond covers all employees to the amount stated on the bond.

ii. Schedule Fidelity Bonds

Name Schedule Bond: Provides coverage for employees specifically named in a schedule. Specific limits applying to each employee are listed in the schedule, as well.
Position Schedule Bond: Provides coverage only for individuals filling specific positions, which are described by position on a schedule attached to the bond.