Surety-ship is at least 5,000 years old, according to some sources - it is even mentioned in the Bible (by King Solomon, no less)! But what, exactly, is it and why would anyone need a surety bond? Suretyship, and surety bonds, are pretty straightforward: in a nutshell, suretyship is a guarantee that a party will deliver a product(s) or service(s) to the customer who orders it.So a surety bond is simply the means by which this promise is made; a surety bond is really nothing more than a third-party contract which ensures the customer hiring a firm or worker will have the services performed, or the products delivered, on-time and as specified. In a very real sense, it is a way of keeping everyone honest. While surety bonds protect both parties involved, they are specifically there to protect the customer.
If the customer does not receive whatever product or service he ordered to the specifications set forth in the bond, he can file a claim with the surety agency. While it is true that this is the reason courts exist, the law can be tricky - not to mention costly. For a company to be eligible for bonding, they must have a good record - good credit, good financial reports - and basically be able to prove themselves trustworthy to the surety bond company. If nothing else, it is a selling-point for some businesses (some industries require it!).
When you order a product or service, you want to be sure the company does not defraud you, go out of business before they deliver, or otherwise fail to perform to specification - a surety bond does exactly that. It keeps both parties confident, honest, and out of court! Even if your industry or relationship doesn't require a surety bond, you might want to consider getting one.
