Surety bonds for small and large businesses

Surety Bonds,
Diverse Solutions
For Small and Large Businesses

What is a Surety Bond?

Surety bonds can be shared in two categories:

• Construction (Contractors)
• Licenses and Permits

1. Construction
A bond usually ensures the execution of contractual obligations. For example, it can be a guarantee for the creditor that the work will be finished on time at the price agreed. This specific type of guarantee is called a performance bond.

2. Licenses and Permits
This ensures that a law or municipal regulations will be respected and that your company complies to the norms in force.

What Is the Use of a Surety Bond?

For Construction
For creditors, it serves to qualify a contractor for any type of activity.

For Licenses and Permits
For the authorities, it is a guarantee that the claimant will go about his activities while respecting the laws and municipal regulations.

Proactive and Efficient Service

Our arrangements with various service providers allow us to issue surety bonds directly at our offices. This way, contractors in need of a surety bond can obtain their documents quickly and efficiently. We also a delivery service.

We can issue the following surety bonds:

Construction:

• Bid bonds and letters of intent
• Materials and labour bonds
• Performance Bonds
• Maintenance Bonds

Licences and Permits

• Permits Bonds
• Customs and Parole Bonds
• Various Other Bonds

Evaluation of Your File

Our brokers will start by analysing your file before submitting it to a qualified company. The analysis of your file is based on information that allows us to establish the capacity of the company to execute its contractual engagements and to respect its financial obligations. Various factors are taken into account including:

• The financial situation of the company
• The quality of its administration
• The experience and credibility of its shareholders and key personnel
• The nature and importance of previous contracts

The documents generally required for this analysis are:

• Financial statements for the last two years, duly verified by an external accountant, including affiliated companies
• Personal balances sheets of the main shareholders
• Confirmation of credit
• Information form for contractors
• List of the work in progress

Types of Surety Bonds

Bid Bonds and Letters of Intent

A bid bond serves as a guarantee of good faith for a contractor who intends to bid for a specific job contract, in particular following an invitation to tender. If the contractor is chosen, he will sign a contract in due time with the client. This bond constitutes an element of selection.

A letter of intent is usually joined to the bid bond. It stipulates that the guarantor commits to issue the performance, material and labour bonds needed if the contractor signs a contract with the client.

Material and Labour Bonds

This bond protects service providers and sub-contractors in case of failure to pay for the services rendered.

Performance Bond

This bond guarantees the client that the contract will be executed in conformity with his dispositions. The contract usually allows a maintenance period after the work is completed.

Maintenance Bond

This type of bond is usually given in exchange for the payment of the contractual hold-back and guarantees the owner that the contractor will correct any defects, omissions or faults for the guarantee period starting at the acceptance of the provisional work.

Permits and License Bonds

It can be required by different government levels for an individual or a company that applies for a licence or a permit to engage in a determined activity. It is used to protect the interests of the organization delivering the documents and those of the public. Some financial documents may also be required.

Customs and Parole Bonds

Customs bonds offer a financial protection that guarantees to the beneficiary the payment of fees and taxes required when crossing borders.
This simplifies the process of transporting goods across borders before determination and the payment of fees and taxes. The level of the bond is subject of a minimum that is pre-established according to the anticipated business volume.

Lareau Insurance Brokers can also offer other types of bonds.

For more information, make an appointment with one of our consultants.