Surety Bonds in New Hampshire

Also providing surety bonds to residents in Massachusetts, Maine, Rhode Island, & Vermont.

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What are surety bonds?

Many contracts for smaller purchases are simply agreed upon and signed. For larger purchases and projects, customers may want more assurance. One way New Hampshire businesses can give their customers additional assurance is by purchasing surety bonds.

Surety bonds may provide a guarantee if a contracted business fails to meet its obligations. In the case of a bad purchase or incomplete work, a bond may compensate the customer.

When do New Hampshire businesses need to get a surety bond?

Surety bonds are often used in situations involving major contracts or large purchases. Construction companies, car dealerships, custodians and fiduciaries in New Hampshire might get a bond.

What kinds of surety bond are available to contractors?

Construction, particularly commercial construction, is one of the most common situations where a surety bond is used. There are a few different bond options available to contractors:

• Bid Bonds: Generally used for reassurance that a contractor will prove good on their construction bid, and proceed forward if selected for the job.
• Performance Bonds: Generally used for reassurance that a contractor will complete an assigned job as the work is detailed in the contract.
• Payment Bonds: Generally used for reassurance that a contractor will pay all of the wages owed to the employees and subcontractors they have.
• Maintenance Bonds: Generally used for reassurance that a contractor will address any defects in their work that are identified after completion.

As these bonds indicated, contractors might get a few different bonds depending on where they are in the construction process. An insurance agent who’s familiar with contractor bonds will be able to help navigate the various bonds that may be needed.

What kind of surety bond is available to auto dealerships?

Auto dealerships in New Hampshire are typically required to have a retail vehicle dealer bond, as a prerequisite for obtaining an auto retail dealer license. The minimum required amount is normally $25,000. This requirement applies to most new and used vehicle dealerships that sell at least 5 vehicles within 12 months.

The purpose of a retail vehicle dealer bond is to protect customers against fraudulent sales of such an expensive purchase. An insurance agent who’s familiar with this kind of surety bond can help dealerships find one that meets the state’s requirements.

Why do fiduciaries need a surety bond?

Fiduciaries may need a surety bond as a means of ensuring they remain true to their responsibilities. Should a fiduciary breach their responsibilities, and act not in the best interest of their client, a bond may provide the client with compensation. Depending on their responsibilities and role, fiduciaries might get a few different kinds of bonds:

• Executor Bond: Usually for ensuring the efficient management and handling of an estate belonging to a deceased individual who had a will.
• Administrator Bond: Usually for ensuring the effective management of a deceased individual’s assets in the absence of a will.
• Guardianship Bond: Usually for ensuring the proper administration and management of assets belonging to a minor or disabled adult.
• Conservatorship Bond: Usually for ensuring the proper and accurate handling of an estate owned by a ward.

A specialized agent who’s familiar with the various surety bond options will be able to make sure fiduciaries get the kind of bond they should have.

Who are the different parties involved with a surety bond?

There are normally three parties involved in each surety bond:

• Surety: Generally is the entity offering financial compensation in the event of a breach. This is typically an insurance company.
• Obligor: Generally is the party obligated to fulfill contractual duties. This is typically a contractor, car dealer, custodian or fiduciary.
• Obligee: Generally is the beneficiary who receives compensation from the bond in the event of a covered breach. This could be a client, customer or ward.

Where can businesses and individuals find surety bonds?

If you need help with surety bonds, reach out to the independent insurance agents at Insurance24. One of our New Hampshire agents will help you find a surety bond that’ll meet your needs.