KRAUTER & COMPANY

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SURETY

UNDERSTANDING SURETY

For many industries, surety bonds can be a vital component for business growth and
success. Surety bonds differ from the traditional lines of insurance coverage. An
insurance policy is a two- party agreement based upon an occurrence (i.e. fire, flood,
accident); a surety bond is a three-party agreement based upon a default. The three
parties to a surety bond include the principal, the surety, and the obligee. The principal
under a bond can be a construction contractor, developer, materials/equipment
supplier, transportation company, or any firm or individual promising to fulfill an
obligation to a third party (obligee). A surety company is typically an insurance carrier,
but in some instances, a financial institution. The obligee can be the government, state,
municipality, or any private entity requiring the coverage afforded by surety bonds.

Under a surety bond contract, the principal and the surety carrier provide a guarantee
to the obligee to fulfill a confirmed obligation (e.g., performance of a contract, payment
of an obligation, or compliance with a law). If the principal fails to fulfill its obligation –
as guaranteed under the surety bond -- the surety carrier is then required to fulfill the
obligation with the surety, then seeking indemnification from their bonded principal and
any other indemnitors. As surety bond placements provide guarantee for both
performance and/or payment of a financial obligation, the underwriting is viewed as a
form of credit extension, heavily emphasizing an entity’s financial strength, as well as
the history of the individual or entity seeking the bond.

WHY KRAUTER SURETY?

Krauter & Company’s dedicated surety team is composed of seasoned professionals,
experienced in all types of industry and bonded obligations. Active in a variety of
industry functions, Krauter surety professionals represent many of the top regional and
national surety bond carriers. Krauter & Company’s reputation and relationships creates
additional accessibility to creative solutions for hard-to-place surety obligations.
Industries serviced by Krauter’s Surety team include:

Construction companies
Service contractors
Transportation companies
Financial institutions.
Developers
Restaurants
Real Estate Firms
Manufacturers
Law Firms
KRAUTER & COMPANY
P r o d uc t s
Krauter & Company’s surety bond expertise includes, but is not limited to, placement of
the following types of bonds:

Performance & Payment

Subdivision – Site Improvement
Maintenance Bonds
Down Payment Bonds
Supply Bonds
Compliance bonds (License and Permit)
Customs Bonds
Financial Guarantee Bonds (**Can be substituted for Letters of Credit
[LOC])
Utility Payment Bonds
Broker/Dealer Bonds
Court Bonds (Appeal, Replevin, and Probate)
Other Miscellaneous Bonds

MORE INFORMATION? CONTACT US.

For more information about Krauter & Company’s Surety capabilities and professionals,
please send your request to: info@krautergroup.com.