What is it?
A surety bond is a guarantee of performance of an obligation.
The bond itself gives rise to a three party relationship where the
Surety agrees to fulfill the obligations of the Principal (the 'insured'
or bonded party) to the Obligee (the beneficiary of the bond), in the
event the Principal is unable to do so. The Surety stands behind the
Principal as a guarantor or 'co-signer'. The Surety typically does not
become involved unless the Principal is in legitimate default of their
obligations to the Obligee, at which point a claim is made under the
bond and the Surety steps in to remedy the failure to
The uses and application of surety bonds are unlimited.
Obligations of almost any nature can conceivably be bonded, however, the
mainstream use of this product can be classed into two
Surety — Bonds that are sold mainly to
construction companies and some manufacturers and suppliers which
guarantee their contractual obligations to project owners or
construction purchasers, some lenders and/or other interested
Surety — Bonds sold to companies and
individuals in order to satisfy government regulations and court orders,
or to replace lost documents such as share certificates.
Surety — Bonds sold to condominium developers
in Ontario to satisfy their security requirements to the Tarion Home
Warranty Corporation, which then guarantees their contractual
obligations to purchasers under the Ontario New Home Warranties Plan
Surety is not insurance. It is more closely related to the
commercial lending practice of financial institutions. As such, a surety
needs to satisfy itself that the party they are bonding has the
experience, financial and capital resources necessary to perform their
obligations. Further, if called to pay out under a bond, a Surety will
seek recovery for their losses under an indemnity agreement or other
security typically taken at the start of the
Motivated. At Trisura we want to write business, even in a
tough economy. We recognize that when our brokers and their clients
grow and prosper, we do the same. We find innovative ways to incorporate
all the merits of an account into our decisions and look for ways to
say 'yes' rather than 'no'. Moreover, we continually look for ways to
make it as easy as possible to do business with us.
Experts. When you speak to one of our underwriters, you
can instantly appreciate how a true expert can help find solutions to
write business. Whether it is a new account or a complicated bond
request, we empower our front line underwriters to make intelligent
decisions and to provide immediate and exceptional service to our
brokers and their clients. While the industry is laden with
inexperienced underwriters, our team is composed of seasoned
underwriters who bring with them knowledge and expertise from a variety
We Are Partners. We develop
relationships with our brokers and their clients. It's the inherent core
of our value proposition. We truly believe we are your business partner
and as such we don't just filter through financial information and
applications. We meet with you and your clients, hear their stories and
find ways to grow all of our businesses in a shared spirit of
entrepreneurialism. We are a broker company. Our premiums and in turn
our profits are derived exclusively from our broker relationships. We
choose our broker partners carefully from among those most informed in
the industry in our product line, because let's be honest;we only
partner with the best!
We Are Canadian.
When an account is submitted, it is underwritten by our experts here in
Canada, not a foreign head office. We underwrite and make decisions
based upon an intimate understanding of your marketplace. Our branch
network keeps us on top of the challenges and nuances specific to your
We Are Trisura. Surety is what
we do. We underwrite with skill,purpose and urgency. We aspire to be
your surety of choice.
You Should Know About Surety
- Surety bonds can
free up your client's capital and their
The alternative to buying a bond is often a
cash deposit or letter of credit. This freezes that amount of money
until your client has honoured their obligation. Bonds,on the other
hand, are cash-flow friendly, and helps free up the funds they need to
- You can tell a lot about
someone by their friends.
Having a surety facility positions the
principal above all those who do not. Having a surety partner means that
an independent party has taken a look at your client's operations and
is satisfied that they are stable, experienced, and well
managed.Securing a surety facility for your client with Trisura places
them a step above their competition.
- Everyone can benefit from a surety
Despite the best efforts of the lead constructor, the failure
of a sub-contractor can seriously derail a project. Sometimes it is
useful for the contractor to ask for bonds from its subcontractors in
order to protect itself from subcontractor failure and the inevitable
cost overruns that result. This is true for General Contractors that
subcontract their work or even prime subcontractors that subcontract
portions of their work. Just because no one is asking your client for a
bond doesn't mean they can't ask their subtrades for one. It's
inexpensive protection that makes good business sense!
Don't forget about
Labour and Material Payment Bonds. Subcontractors at any level should
ensure the contractor above them has posted a Labour and Material
Payment Bond. This vital yet often forgotten security will protect
- Calling your
surety shouldn't be considered bad.
It's in everyone's
interest to complete a job on-time and on-budget. If your client finds
themselves in a tricky situation, use Trisura as a consultant for input
and advice. We have a great cross-section of experience and knowledge on
our team. We are at your service as your business
- Not all bonds are
Not infrequently, an Obligee will specify the
use of a particular wording for a surety bond. In some instances, the
wording can contain onerous provisions or be so subjective that it could
create serious delays or problems when adjusting a claim.The use of
such bond wordings should be treated with the same duty of care as the
underlying contract a Principal is signing.