Why Surety Bonds are Important
Although consumers are often oblivious to it, the government and court systems of Canada operate consistently behind the scenes. When a consumer or business is forced to interact with a governmental agency or file a suit in court, it is highly likely that they’ll need to acquire some type of surety bond. Many Canadians are unfamiliar with surety bonds and their specific purposes. This is incredibly bad, since bonds are utilized for an enormous number of purposes and they cover innumerable things. Within this guide, you’ll learn about some of the most common bonds of Canada and precisely what they cover.
Construction Related Bonds
There are hundreds of different construction companies, contractors and subcontractors operating in Canada. These entities are required to make full use of constructions bonds, in order to acquire jobs. The specific bonds that they utilize govern their unique duties and help to protect the clients that they work with. Below, you’ll learn about a few construction bonds and what each covers.
- Bid Bonds – Contractors, who wish to place a bid on an open project, utilize the bid bond. The bid bond protects the project owner, by guaranteeing that the selected contractor will follow through with their responsibilities and will obtain the necessary performance and payment bonds.
- Performance Bonds – The performance bond also covers the project owner and provides them with additional protection. In this sense, it covers the contractor’s performance and guarantees that they’ll deliver a satisfactory result.
Of course, construction bonds are simply a minute amount of bonds utilized within the country of Canada. While construction bonds primarily cover project owners, contractors and subcontractors, other types of bonds cover other industries and different groups of people.
Whereas construction bonds are crucial for those within Canada’s construction industry, court bonds directly impact the country’s court systems. With court bonds, the court system and the individuals or companies involved in a lawsuit are typically covered. Of course, each unique type of bond is different and the specifics will vary enormously. Below, you’ll learn about the specific protections offered by a few different types of court bonds.
- Appeal Bonds – In order to file an appeal within Canada, it is almost always required that you obtain an appeal bond. The bond covers the appellate system and helps to prevent abuse. It also offers protection to the individual or company on the other side of the appeal, by guaranteeing that the appellant will pay the original judgment, if they lose their appeal.
- Fiduciary Bond – This is one of the most common court bonds utilized in Canada. This bond covers the behavior of someone, who becomes responsible for overseeing an elderly person’s belongings and finances. The bond prevents abuse and protects the elderly or disabled individual, who is no longer to care for his or her own assets.
Wrapping It Up
All in all, there are many different types of bonds and each of them covers something different and comes with a different cost for the surety bond. In order to find out precisely what is covered, it is vital to get detailed information about the specific bond in question.