THE FALLS INSURANCE CENTER, INC.
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What does a construction company, a home health care agency, and a livestock dealer all have in common? They all have a need for a surety bond, and without one, may risk financial disaster.
A surety bond is a contract in which one party agrees to make good on a default or debt of another party when unforeseen circumstances cause a delay or loss. Surety bonds are required in the U.S., Canada, and several other countries for most government work and large private projects.
Surety bonds are not insurance products and will not substitute for an adequate insurance policy. A surety bond is a three-way agreement made between a surety, typically an insurance company; the principal, which is the company buying the bond; and a beneficiary, the party that may benefit from the bond. A private health care agency, for example, is the principal, buying bonds mandated in the United States for any company receiving Medicare or Medicaid benefits. The government is the beneficiary if Medicare fraud is proven, and an insurance company is the surety. A claim can be made on a bond only when the company buying the bond has made every effort to pay a debt or complete a project.