Posted by: jmwilsonmga | August 23, 2011

Top 10 Surety Questions with Robyn Shepherd, AFSB : Part 1

Robyn Shepherd, Surety Underwriter and Expert, will be sharing some of our agents’ most frequently asked questions regarding surety.  What surety or bonds questions do you have?  Please share in the comments!

 Question 1 : What is a Surety Bond?

A surety bond is 3 party agreement between:

  1. The obligee- entity protected by the bond
  2. The principal- entity promising  performance
  3. The surety- the insurance company guaranteeing the principal’s performance

Question 2: Who needs bonding?

  • Contractors, business owners, fiduciaries, and public officials

Question 3: What are the different classes of surety bonds?

Surety bonds fall into the following 5 classes:

  1. Contract Bonds – Performance, Payment, Maintenance, and Bid Bonds.
  2. License & Permit bonds – Required by Federal, State, and Local governments to guarantee the principal will uphold the law.
  3. Court Bonds– Required in a court of law.
  4. Public Officials  Bonds– Public employees holding certain offices.
  5. Miscellaneous Bonds – Bonds that do not fit into the other bonding categories.

Question 4 : What is the difference between fidelity bonds and surety bonds?

  • Surety bonds are contractual agreements to guarantee performance between the obligee and the principal. Fidelity bonds are often called “Dishonesty” or “Crime” insurance and protect the employer against dishonesty of his owner employees. Fidelity bonds run more along the lines of insurance. Examples include Janitorial Bonds, ERISA bonds, and Commercial Crime bonds.

Question 5: Do surety bonds have premiums?

  • Yes and no. Surety companies charge a premium, however the premium generally just covers the cost of underwriting and administrative fees to maintain the bond. Bond premiums are not designed to mitigate the cost of a bond claim.

    Meet The Expert : Robyn Shepherd, AFSB

Robyn has been a member of the J.M. Wilson Team for over three years and currently serves as Bond Underwriter.  She underwrites and researches surety markets for surety customers. This includes license & permit bonds, public official bonds, fidelity bonds, probate bonds, and contract bonds.  Robyn enjoys helping principals and businesses stay compliant with state laws and meet all licensing requirements by finding the right surety market for their bonding needs.  In her spare time, Robyn loves spending time with her two small kids; doing crafts and attending soccer games/practices.  She also enjoys exercising, walking, reading, knitting, and attending events at her alma mater, Purdue.

Connect with Robyn on LinkedIn!

Disclaimer :  This article is for informational purposes only.  There is no legal advice being suggested or proffered.  The author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information.  This article is the opinion of the author and is not supported or endorsed by J.M. Wilson.  It should not be relied upon and may contain inaccuracies or content may have changed over time, contact your underwriter for the most current and accurate information.  Any comments or responses are the opinions of their authors.  Content on this site is believed to be covered under Fair Use.

Copyright 2011 J.M. Wilson Corporation


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