Think of Surety Bonding as a money-back guarantee. If you are a company with a project finance entering into a loan a contract, a Surety Bond is a guarantee that the lending company or individual will deliver on the specific obligation signed as a contract. The lending company is the Principal, and if the principal doesn’t meet the obligation of the contract, then the beneficiary, known as the Obligee, may make a claim. The third party of a deal is the Surety. This is the company that pays up on that guarantee if the principal doesn’t follow through as expected.
Surety is the financial guarantee that the Principal will deliver on its obligations as specified in the contract. If your company is entering into an obligation with a governmental agency or bureau, a private entity, or a federal, provincial, or local court, surety gives that entity piece of mind that you will fulfill the obligation as contractually promised. Surety can assist in guaranteeing just about any obligation that your company can find itself entering into.
The cost of a Surety bond varies significantly based upon the financial strength of the principal as well as the details of the obligation being covered by the Surety.
Though actual costs may differ between Contract and Commercial Surety, a common fact is that Surety bonds normally cost between half a percent and three percent of the value of a contract or bond obligation (limit). The bond cost is referred to as the Premium, though it is not to be confused with insurance, which uses the same terminology. Bonds are often priced on a sliding-scale which means the larger the bond, the lower the percentage, and vice-versa. With respect to Commercial Bonds, the cost is often a flat rate with the exception of Estate Bonds.
Provides coverage for the lender’s interest in mortgaged property in the event of uninsured or underinsured damage to the property. Mortgage impairment insurance is a specialty property insurance provided for mortgage lenders. At HELMET SECURITIES LIMITED, we ensure that the coverage is broadened beyond the industry standard to include such coverage as Earthquake and Flood, in addition to Mortgage holder’s Errors and Omission.
With a wave of innovative technologies and business successions, a somewhat uncertain economic environment, and robust availability of capital, M&A continues to be a significant growth strategy for a variety of buyers.
As valuations climb and competition increases for a scarcity of useful assets, both buyers and sellers are seeking a competitive advantage. Sellers are looking for greater certainty on post-closing adjustments, while buyers are seeking fair risk allocation.
In addition to Representations and Warranties insurance, other transactional risk insurance products are available to mitigate post-closing risk, help smooth the transaction process, and ultimately create a win-win situation for all deal partners.
At HELMET SECURITIES LIMITED, we can further support your transaction with benefit insurance and due diligence services to help you understand your target or prepare your business for sale. We can support with go forward operational insurance with best-in-class capabilities across a variety of industry verticals.
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