Surety Bonds in Pennsylvania

Also providing surety bonds to residents in Maryland, North Carolina, New Jersey, and Virginia.

Anthony Acri Insurance

What are surety bonds?

Sometimes customers want an additional guarantee. On big projects and purchases, that’s what surety bonds are for. Pennsylvania businesses in many sectors might use this to reassure their customers.

Surety bonds can offer additional assurance in contracts, especially for larger purchases or projects. They may act as a guarantee that a contracted business will fulfill its obligations. If a business fails to meet these obligations, resulting in a bad purchase or incomplete work, the bond may compensate the customer.

When do Pennsylvania businesses need a surety bond?

Surety bonds are often required for major contracts and major purchases. In Pennsylvania, construction companies, car dealerships, and fiduciaries might all get a bond. They can be used by select other businesses, too.

What kinds of bonds are available for contractors?

Contractors working on large-scale projects, especially in commercial construction, often need a few different surety bond options. As a project progresses, contractors might need:

• Bid Bond: Normally guarantees that a contractor will honor their construction bid, and move forward if chosen for the job.
• Performance Bond: Normally guarantees that a contractor will complete an assigned job according to the specifications detailed in the contract.
• Payment Bond: Normally guarantees that a contractor will pay all wages due to their employees and subcontractors.
• Maintenance Bond: Normally guarantees that a contractor will rectify any defects in their work that are discovered after the project’s completion.

An insurance agent who knows these bonds well can help contractors find the right bonds as they progress through a project.

What kind of bonds are available to auto dealerships?

Auto dealerships in Pennsylvania are generally required to obtain a dealer bond of at least $20,000 or $30,000, depending on their specifics. This is one of the items required to file for a motor vehicle dealer license.

The purpose of an auto dealer bond is to better protect customers against fraudulent vehicle sales.

Why do fiduciaries need to have a surety bond?

Fiduciaries might need a surety bond as a guarantee that they’ll adhere to the responsibilities they bear. The bond provides reassurance in case a fiduciary fails to act in the interest of their client. There are a few types of these bonds, for fiduciaries in different roles:

• Executor Bond: Mainly for overseeing the estate of a deceased person who left a will.
• Administrator Bond: Mainly for overseeing the assets of a deceased person who didn’t leave a will.
• Guardianship Bond: Mainly for managing the assets of a minor, or an adult with disabilities.
• Conservatorship Bond: Mainly for administering an estate belonging to a ward.

An experienced agent can assist fiduciaries in selecting the appropriate bond, given their duties and responsibilities.

Can garage keepers policies cover classic and exotic cars?

Garage keepers policies are available for classic, exotic and other expensive vehicles. It’s important to choose a policy that has coverages, terms and limits suitable for these vehicles, however. A knowledgeable insurance agent can help find a policy that’ll provide robust coverage for such vehicles. 

Who are the parties involved in a surety bond?

A surety bond typically involves three parties:

• Surety: Usually the entity providing financial compensation in case of a contract breach, typically represented by an insurance company.
• Obligor: Usually the party responsible for fulfilling contractual obligations, often a contractor, car dealer, or fiduciary.
• Obligee: Usually the beneficiary who is compensated by the bond if there’s a covered breach, often a client, customer, or ward.

How much does it cost to get a surety bond?

The cost of a surety bond varies, as it depends on many different factors. The type of surety bond, amount, and business’s history are some of the main factors that influence cost.

In most cases, however, these bonds are quite affordable. One of their primary purposes is to give clients and customers financial reassurance, without requiring businesses to retain enormous savings.

To find out exactly how much a bond will cost, businesses can compare their options with an independent insurance agent. An independent agent will be able to check bonds from several different companies.

Where can businesses and individuals in Pennsylvania find surety bonds?

If your business needs a surety bond, contact the independent insurance agents at Acri Insurance Agency. Our team has helped many Pennsylvania businesses with surety bonds, and we’ll make sure you find the right one for your business.