Full access to Entrepreneur for $5

Are You Surety?

You don't have to eat the loss when a supplier screw-up hurts your business.

This story appears in the July 2002 issue of Entrepreneur. Subscribe »

You contract with a technology company to develop an expensive customized software package, but they fail to deliver. Do you have any recourse other than filing a lawsuit? You do if you required that vendor to provide a surety bond as a condition of your purchase agreement.

A surety bond is a special type of insurance where the surety company guarantees to one party (known as the obligee) that another party (known as the principal) will fulfill a contract or obligation. These bonds are most commonly used in the construction industry, but they are suitable for use in a variety of commercial situations.

Continue reading this article -- and everything on Entrepreneur!

Become a member to get unlimited access and support the voices you want to hear more from. Get full access to Entrepreneur for just $5!