Call Us 502-348-5921 ☰ ˟
Logo
Call Us 502-348-5921 to get your personalized insurance quote
  • Home
  • Get A Quote
    • Automobile
    • Bonds
    • Business & CommercialImage of right arrow
      • Group Health & Employee Benefits
      • General Liability Quote Form
      • Business Owners (BOP) Quote Form
      • Workers Compensation Quote
      • Commercial Auto Insurance Quote
      • Surety Bond Request
    • HealthImage of right arrow
      • Health Insurance Quote
      • Health Instant Humana Quote
      • Health Instant Anthem Quote
    • HomeownersImage of right arrow
      • Homeowners Insurance Quote
      • Homeowners Insurance Quote
    • Life
  • Customer Service
    • AutomobileImage of right arrow
      • Request ID Card for Auto Policy
      • Add Vehicle to Existing Auto Policy
      • Remove Vehicle from Existing Auto Policy
      • Add Driver to Existing Auto Policy
      • Remove Driver from Existing Auto Policy
      • Update Contact Information for Auto Policy
    • Business & CommercialImage of right arrow
      • Request a Certificate of Insurance
      • Request a Business Policy Change
      • Update Contact Information for Business Policy
    • HealthImage of right arrow
      • Request Declaration and Coverages Page for Existing Health Insurance Coverage
      • Request a Health Policy Change
      • Update Contact Information for Health Policy
    • HomeownersImage of right arrow
      • Request Declaration and Coverages for Existing Homeowners Insurance Coverage
      • Request Evidence of Insurance
      • Request a Mortgage Change
      • Update Contact Information for Homeowners Policy
    • LifeImage of right arrow
      • Request Declaration and Coverages Page for Existing Life Insurance Coverage
      • Request a Life Policy Change
  • Claims
    • Other
  • Blog
  • Make a Payment
  • Resources
    • Refer a Friend
    • Important Links
    • Insurance Glossary
  • About Us
    • About First Insurance Group
    • Our Locations
    • Employee Directory
    • Customer Testimonials
    • Privacy Policy
  • Contact
    • Contact Us
    • Join Our Newsletter
Home > Blog > How to Respond to a Bond Claim
THURSDAY, FEBRUARY 8, 2018

How to Respond to a Bond Claim

As a contractor, you understand that working means entering into binding agreements. Contracts more or less are rules to let business parties know what to expect from one another. Parties who work with contractors will expect the contractor to complete their work according toimage of hard hat and gloves the stipulations of the contract.

If the contractor cannot complete their work, they likely are in violation of the contract. Violating contracts could cause hardships for the contractor and their clients. To allay these risks, clients often require the contractor to carry surety bonds. Surety bonds essentially serve as insurance for the client should the contractor fail to deliver. What happens if you have to file a claim on a bond?

What are Bonds?

A surety bond is not insurance. However, it serves as a financial guarantee. You (the principal) enroll in a bond as part of a contract. You guarantee your client (the obligee) that you will repay them for any cost losses that result if you can’t complete the contract. You obtain a bond from a surety company.

If the contract falls through, the obligee can file a claim on the bond. The surety company will then issue payment to the client for their losses. However, the principal does not get off for free, like they would with standard insurance. The principal will then likely have to repay the sum of the claim to the surety company. This is how a surety bond differs from insurance. It only guarantees that the principal has the assets and support to pay back claims.

What if I Face a Bond Claim?

No contractor wants to face a bond claim, as it means you might have to pay. However, if a claim arises, you likely need to follow a process to respond.

  1. Review the contract. You should know ahead of time what you will have to do to file or respond to a claim. Always follow the terms of the bond and contract when responding to and submitting the claim.
  2. Know how the surety company will expect re-compensation.
  3. Keep all documentation relating to the contract on file. You will likely have to submit it to the surety company to assist with processing the claim.
  4. Work with the surety company to ensure the fast payment of the bond.

Remember, a contract failure may lead to more than just monetary repayment. The surety company might take over helping the client find a new contractor to complete the work. Therefore, work closely with the surety company throughout the claim’s duration to settle the matter. Contact one of our agents at 800-511-2892 for more information.

Additional Information: 

Proper Contract Execution with Surety Bonds

How Much of the Full Bond Value Does a Business Pay?

Do you Need a Bond & Business Insurance?

Posted 5:57 PM

Tags: bonds, finance, security, insurance
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016
  • 2015
  • 2014

  • insurance(72)
  • kentucky(58)
  • tips(44)
  • business insurance(42)
  • coverage(32)
  • safety(21)
  • savings(18)
  • auto insurance(18)
  • home insurance(16)
  • somerset(16)
  • health insurance(15)
  • life insurance(15)
  • lexington(15)
  • richmond(14)
  • frankfort(13)
  • first insurance group(12)
  • health(10)
  • virginia(9)
  • bardstown(9)
  • bonds(9)
  • workers compensation(9)
  • nicholasville(7)
  • kentucky insurance(6)
  • general liability insurance(6)
  • commercial auto insurance(5)
  • car insurance(5)
  • lexington business insurance(5)
  • liability(4)
  • surety bonds(4)
  • protection(4)
  • homeowners insurance(4)
  • workplace safety(4)
  • fitness(4)
  • small business insurance(3)
  • security(3)
  • finance(3)
  • back pain(2)
  • trucking insurance(2)
  • lexington health insurance(2)
  • worker's compensation(2)
  • home insurance lexington(2)
  • workers comp(2)
  • winter(2)
  • workers compensation insurance(2)
  • risks(2)
  • flood insurance(2)
  • insurance types(2)
  • medical(2)
  • bop(2)
  • business(2)

View Mobile Version
Contact us
502-348-5921
Quick Links
Home Our Products Customer Service Payment Options Report a Claim About Us Our Carriers Partners Blog Contact Us
Locations

Bardstown

107 Lincoln Way
Bardstown, KY 40004

Phone: (502) 348-5921

Frankfort

Our Virtual Office
Frankfort, KY 40601

Phone: (502) 223-5100

Nicholasville

508 North Main St, Suite C
Nicholasville, KY 40356

Phone: (859) 885-9454

Danville

811 S Fourth Street
Danville, KY 40422

Phone: (859) 236-5192



Twitter Icon Facebook Icon LinkedIn Icon Google Icon


© Copyright. All rights reserved.
Powered by Insurance Website Builder