The surety insurance definition is the same as a surety bond. When people refer to surety insurance they mean surety bond. The names aren’t exactly interchangeable, however, as surety bond is the preferred term.
Regardless of preference, it is still important to discuss the surety insurance definition to clear up any misgivings about the topic.
Understanding Surety Insurance
Surety insurance is the same as a surety bond. Surety protects parties involved in money owed and in actions taken.
One example to bring the surety insurance definition to life is the garnishment bond.
When a plaintiff wishes to garnish the wages of a defendant the court requires them to secure a surety bond. Each state requires this action to give the defendant full protection against a wrongful garnishment.
The garnishment bond covers the value of the wages or assets garnished from the defendant. In the event that this wage garnishment is unlawful then the surety bond works basically like an insurance plan in recovering lost funds.
The Small Business Chronicle gives a nice overview of the surety insurance definition for further information.
States Surety Requirements
All 50 states have surety bond requirements. Some Secretary of State pages will list the surety insurance definition or surety bond mandates.
Businesses, especially construction companies, use surety bonds to cover their expenses, projects, damages. Without this type of protection, they would be on the hook for large sums of cash due all at once.
A wage bond is a surety bond required by construction companies to ensure all employees are paid. Any construction project for a municipality always includes a wage bond to prevent any liens on the property.
Get Answers Today
Still have questions about the surety insurance definition and how it may apply? Contact Jurisco today to speak with a surety bond expert about what’s going on and if a bond is the best way to help.