This form of bond is a way of ensuring that one party ( the principal) fulfills its obligations against another (the obligor) in a contractual transaction. These obligations could include following legislation and regulations, fulfilling fiduciary responsibilities, or complying with contractual obligations.
The obligor is permitted to file a claim against the bond seeking compensation where necessary. If the principal doesn't, the company that issues the bond (the security) agrees to pay, but the principal (you) must reimburse the guarantee in full.
The best time to earn a commercial security bond is when you think you need one. First, you need to contact a trusted brokerage agency such as Viking Bond Service to help broker the bond you need in the state you need it. Then you'll fill out an application that includes your credit and business history details. First, in 48 hours or less you'll receive a bond quote based on that detail. Eventually, to trigger the bond, you pay the prime. You have now fulfilled the criteria for the bond.
infographic by: www.performancesuretybonds.com