Commercial Bonds in Alaska

A Surety Bond isn't insurance, even though people often assume it is; it's underwritten differently and serves a different purpose.

At its core, a Surety Bond is a guarantee; what exactly it guarantees depends on the specific bond language. Every surety bond involves three parties.

The 3 parties involved are:

  • The Principal – the primary business entity who will be performing a contractual obligation.
  • The Oblige – the party who is the recipient of the obligation.
  • The Surety – who ensures, guarantees the principal's obligations will be performed. Sureties are similar to insurance companies.

In plain terms, the Surety agrees to make good on the principal's contractual obligations to the oblige if the principal falls short. Many customers require a bond before agreeing to work with a contractor at all.

The 2 main categories of Surety Bonds:

  • Contract Surety Bond
  • Commercial Surety Bond

A Contract Surety Bond in Alaska guarantees a specific contract, while a Commercial Surety Bond guarantees the terms spelled out in the bond form itself.

Want to know more about bonds? Call a licensed professional at Alaska Service Agency at (907) 337-2311.

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