Griffin Inurance Agency
506 Ward Street West
Douglas. Georgia 31533
Phone 1-800-867-1503
Fax 912-384-8014
Pro Insurance Brokers
6780 Houston Rd
Macon, Georgia 31216
Phone 1-800-867-1503
Fax 912-384-8014

What is a Surety Bond?

Webster's dictionary defines a Surety Bond as "a bond guaranteeing performance of a contract or obligation." That simple definition is at the base of a specialized and detailed series of agreements with roots as old as civilization.

Where do Surety Bonds come from?

The original Surety guarantee was by individuals, one friend stood surety for another. This type of personal surety guarantee is totally inadequate to meet the needs of the modern world. For over one hundred years, corporate Surety companies have provided a wide range of Surety bond guarantees. Although Surety bonds are generally written by insurance companies and are regulated by state insurance departments, surety bonds are not insurance. Surety bonds more closely resemble loan guarantees given by banks.

How does a Surety Bond work?

A Surety bond is a guarantee involving three parties, the Principal is the person or business with an obligation to perform. The Obligee is the person, company or governmental unit requiring the guarantee. The Surety company provides the bond to guarantee that the Principal fulfils their obligation to the Obligee. As long as the Principal performs their obligation the Surety company has no role. The best Surety bond situation is when the Principal fulfils their obligation, the Obligee is satisfied and the Surety company takes no part in fulfilling those obligations. If the Principal does not do what is required, the Surety company has to meet the obligations. If this happens, the Surety company is entitled to be reimbursed for losses and costs by the Principal. Before a bond is written, the Surety company will require the Principal to provide an indemnity agreement from the business and also the personal indemnity of the Principal.

Why do we need to have Surety Bonds?

Surety bonds are a risk transfer mechanism. The risk of the Principal performing their obligation is shifted from the Obligee to the Surety company. Federal, state and local governments may require bonds to guarantee that the Principal will comply with various laws or pay taxes. Contract bonds, protect the taxpayers money by guaranteeing that projects are awarded to the lowest bidder. Judicial and public official bonds all help to protect and secure public funds and private interests.

How do I get a Surety Bond?

You may submit completed applications to your bond underwriter in the Home Office in the Special Lines Underwriting department. You may call them or send an e-mail at the numbers listed on the roster. The more you can tell us about the applicant and their needs, the more quickly the bond can be issued. Brochures, business plans and resumes of owners are information sources that assure timely turnaround of the bond. Additionally, you can issue most bonds directly from your own office if you have a "Power of Attorney" from Auto-Owners. Contact your bond underwriter or Marketing Representative to find out more about obtaining a Power of Attorney.

What are the different types of bonds?

There are thousands of bond requirements, each covering a different obligation. The following are the major classes of Surety Bonds.

Judicial bonds

These bonds are a guarantee that the Principal will comply with the instructions of the court. These may be probate or court bonds.

Court bonds

Complete the top of the application and the Court Bonds other than Probate section along with the signatures indicated on the back of the application. A copy of the court papers will be needed. Either complete the financial statement information on the back of the application or provide a separately prepared statement.

Court Bonds such as Sheriff's Indemnity, Plaintiff's Replevin or Supersedeas bonds that may require a more lengthy explanation. A copy of the court papers and a financial statement are required.

Probate bonds

Probate Bonds by completing the top of the application and the Probate section along with the signatures needed as indicated on the back of the application. In some cases, a copy of the will or court appointed papers may be required.

Public Official Bonds

Guarantee that a public official will serve their elected or appointed office properly.

In regards to Public Official Bonds. Complete the top of the form and the Public Official section along with the signatures needed as indicated on the back of the application.

Pre-executed Notary Bond forms are used in various states for Notary Bonds. These forms have the Notary Bond form required by each state and a Notary Errors and Omissions Policy.

License and Permit Bonds

Guarantee that an individual or business granted a license or permit to operate a business or to exercise a privilege will meet their obligations under the law.

For License Bonds, complete the top of the form and the License and Permit section along with the signatures needed as indicated on the back of the application.

For Vehicle Dealer Bond requirements vary in many states. In order to apply for this bond, you only need the completed application and the bond form required by the state.

Pre-executed License Bond forms are used for bond requirements of local governments for bonds up to $25,000. Since most bonds required by state governments are on their own forms, the pre-executed bonds were not designed for those bond requirements.

Contract Bonds

Guarantee that the Principal awarded a contract will complete their work and pay their bills during that contract.

Our contract bond application is available here ******* and is used to prequalify a contractor for Bid, Performance and Payment Bonds. This form must be completed and returned with the information listed inside the front cover of the form. In addition to the application, please send the following:

  • Last fiscal year-end business financial statement,
  • Applicant's personal statement,
  • Aging of accounts receivable,
  • Contract Status Report, Form 29057, and
  • A copy of the line of credit issued by the contractor's bank.

The contract bond application ******** can be used if a contractor has not been prequalified for Contract Bonds. This application may be used to apply for a specific contract. The entire application must be completed, signed and dated.

Miscellaneous Bonds

Guarantee a variety of obligations not classified elsewhere, including travel agency bonds and lost instrument bonds among others.

For any Miscellaneous Bond, complete the top of the application, the Miscellaneous Bond section, and the Financial Statement section. If applying for a Lost Instrument or Lost Securities Bond, complete the Lost Securities Bond section.

Employee Dishonesty and Forgery Coverage

An Employee Dishonesty policy covers the business for loss of money, securities and other property for theft by an employee.

Application ***** is used to apply for Blanket or Scheduled Employee Dishonesty Coverage and also for Forgery Coverage. No individual applications are required for Blanket Employee Dishonesty Coverage. For Scheduled Employee Dishonesty Coverage, each person named in the schedule or occupying a position shown on the schedule must complete the Schedule Fidelity Bond section of Bond Application

Application ***** is used when the applicant needs Employee Dishonesty Coverage to cover an employee benefit plan per federal statues. No other application is required for either Blanket or Scheduled Employee Dishonesty Coverage for Welfare and Pension Plans.