Surety Bonds are obtained by principal parties to protect third parties from a failure to meet contractual obligations. There are four main types of bonds that serve the different purpose namely: contract surety bond, commercial surety bond, fidelity surety bond, and court surety bond. The most common surety bonds are the commercial and contract surety bond and serve the purpose of protecting the public and private interests. The court and fidelity surety bonds protect against the litigation and theft. Surety bonds of all types cost a premium based on the performance of the business and credit score of the business owner, which is between 1-15% of the bond value.
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The major companies operating in the market include AmTrust Financial Services, Inc.; Crum & Forster; CNA Financial Corporation; American Financial Group, Inc.; The Travelers Indemnity Company; Liberty Mutual Insurance Company; Hartford Financial Services Group, Inc.; HCC Insurance Holdings; IFIC Surety Group; and Chubb Limited among others.
The global surety market for the bond type is fragmented into Contract Surety Bond, Commercial Surety Bond, Fidelity Surety Bond, and Court Surety Bond. Commercial Bonds are general surety bonds that are required by various government agencies state local or federal. Commercial bonds are primarily used by companies or working professionals as per state licensing and permit regulations. Commercial bonds are easy to qualify as they incur low-risk. Commercial bonds protect the general public from that interact with the principal being licensed. The claim is made by someone who faced losses due to the violation of rules and regulations by the bonded principal. The agency checks various parameters before fixing the bond amount such as the number of employees, number of physical locations, and the type of business. Usually, the commercial bonds are annual bonds that are to be renewed every year in some cases bonds are also required for multi-year increments like service tax bond.
Further, surety market is expected to experience significant growth in the coming years due to the increasing demand of commercial bonds. The commercial bonds are gaining popularity in the markets of North America and Europe. Commercial bonds are replacing LOC as they provide a better method for risk management. Some of the big insurance like Crum & Forster, CAN Insurance Group, American Financial Group, Inc., and The Travelers Indemnity Company has a strong focus in providing commercial surety products.
The report segments the Global Surety Market as follows:
Global Surety Market - By Bond Type
Contract Surety Bond
Commercial Surety Bond
Fidelity Surety Bond
Court Surety Bond
Global Surety Market - By Geography
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