Posted by Insurance City on
Bonds confuse a lot of business owners because they look like insurance but work differently. Here’s the plain version for Central Valley contractors and businesses.
A bond is a guarantee, not insurance
A surety bond is a three-party promise: the surety guarantees to the party requiring the bond (the obligee) that you’ll meet an obligation. If you don’t and the surety pays, you repay the surety. That’s the opposite of insurance, where the carrier absorbs the loss.
The bonds you’ll run into
- License & permit bonds — including the California contractor license bond required by the CSLB.
- Bid bonds — back your bid on a project, guaranteeing you’ll honor it if selected.
- Performance bonds — guarantee you’ll complete a job per the contract.
- Payment bonds — guarantee you’ll pay your subs and suppliers.
How you get bonded
Because it’s a guarantee, the surety reviews your business and credit. We work multiple surety markets to get you approved for the bond your license or job requires.
Need a bond?
Insurance City is a local independent brokerage in Stockton. Call (209) 670-1556 or see our surety bonds page.