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What is a Bond?

Bonds differ from insurance policies since they are an agreement involving three parties, rather than two.  Often, these three parties agree to a guarantee of performance of some kind.  If the first party, known as the principal, fails to perform, the second party, or oblige, is protected by a third party surety carrier.

Bonds in Massachusetts

What Type of Bonds are Available?

There are several bonds types, all designed for very specific scenarios.  There are Surety bonds such as a payment bond, a maintenance bond, a judicial bond, or there are Fidelity bonds. However, the most commonly purchased bonds are Contract bonds, License and Permit bonds and Bid bonds

Types of Bonds:

  • Contract bonds guarantee the performance of a principal to complete work according to a contract with an obligee. For example, the City of Boston entering an agreement with Paul’s Construction Company to complete a new commuter rail line.   As part of the agreement, Paul’s Construction must purchase a Contract bond to protect the City of Boston if they do not complete the work.
  • Bid bonds are very similar to a performance bond. However, these bonds are established prior to submitting a project bid.
  • License and Permitted bonds guarantee the performance of an individual who needs a license in order to operate such as a plumber, electrician, alcohol vendor, barber or real estate agent.  These bonds guarantee compliance, good faith, credit, financial or indemnity agreements.

How Can I Get a Bond in Massachusetts?

First, determine the type of bond and amount required for your line of business or project.  As an independent agency, we can rate bonds from multiple carriers to save you time and money.  You also have the advantage of working with an experienced agent that can provide recommendations and help you make an informed decision regarding your purchase.

Receive a Free Bond Quote!