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Health Club Surety Bonds
Fitness Underwriters is a viable
market for health club surety bonds. This market was developed to cater to
our existing insurance clients. When most surety companies ceased issuing
this type of bond to the health club industry, we developed an exclusive
market. Through careful underwriting, we have been able to maintain an
excellent bond program.
GLOSSARY OF TERMS
- BENEFICIARY:
- A person who is entitled -- by law or bond language -- to
claim against a bond even though not specifically named as an Obligee.
- BID BOND:
- An obligation undertaken by a bidder promising that the
bidder will, if awarded the contract within the time stipulated, enter into
the contract and furnish the prescribed performance and payment bond(s).
- BOND:
- An obligation undertaken by a third party promising to pay
if a contractor does not fulfill its valid obligations under a contract.
Some bonds may also promise that the Surety will perform if the contractor
fails to.
- INDEMNITY BOND:
- A bond which promises to reimburse an Obligee for loss
incurred when a Principal fails to perform its contract or (in some cases)
fails to pay for material, services or labor used in prosecution of the
contract.
- MECHANIC'S OR SUPPLIER'S LIEN:
- A right given by statute to certain persons - typically
suppliers, laborers, architects, etc. - who perform services improving real
property. If they are unpaid, they may file a claim against the property and
force the owner to pay even if the owner has already paid a prime contractor
for their goods or services.
- OBLIGEE:
- The named person to whom, under a bond, the promises of
the Principal and the Surety run. For a prime contract performance bond, the
Obligee is usually the owner.
- LICENSE BOND:
- A bond required of all licensed contractors in certain
states for the benefit of specific persons designated by statute. Some of
these states allow a cash deposit with the state in lieu of a bond.
- PAYMENT BOND:
- A bond which promises to pay some or all of the persons
who provide materials, labor, or services for prosecution of a contract.
- PERFORMANCE BOND:
- A bond which promises that the terms of a contract, or
some of them, will be performed by the Principal.
- PENAL SUM:
- The limit of the Surety's liability under its bond. The
amount may be fixed by statute (for license and permit bonds), by the
initial contract amount (for performance/payment bonds), or by some other
means.
- PRINCIPAL:
- The bonded contractor, who has the primary responsibility
for completing the obligations of a contract.
- SURETY:
- The third party (usually an insurance company) who
promises to pay if the Principal fails to fulfill its obligations under a
contract.
For more information on bonds or to submit an
application for a Surety Bond click
here.
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