How Does Surety and Bonding Work in New Jersey?
Surety bonds serve to guarantee fulfillment of an agreement or compensation should the agreement fall through. These contracts protect the client rather than the individual or business making the purchase (the principal), and if the principal fails to uphold their end of the agreement in any way, the surety will pay any related claims.
Surety bonds are unlike most types of insurance because they do not protect the buyer. Instead, they largely protect customers and taxpayers from financial losses, and in many cases, surety bonds are required by state and federal law for contractors and businesses.
Customers may file a claim if any party involved in the surety bond violates the terms of their agreement.