Surety Bond Insurance Coverage: Surety Bond Solutions with LMBF

Surety bonds aren’t like any other insurance product, in that they involve three parties as opposed to the typical two. Surety bonds are still paid for in premiums and are often mandatory depending on your hiring body. Surety bond insurance involves a principal, an obligee, and a surety. Similar to insurance, surety bonds function as a promise that business will be conducted in a professional and an ethical manner - and for many customers, it’s an indication of your trustworthiness and reputability as a professional. LMBF can start you with a free surety bond insurance quote today.

What Surety Bond Insurance Coverage Offers



As the business (or the principal) your surety bond insurance can provide you with credit and reputability, offering your client with confidence knowing that they may receive financial recourse should something go wrong or if the contract isn’t adequately fulfilled.



Surety bonds ensure the client’s security when agreeing to work with you. Surety bonds are not a replacement for regular business insurance coverage, so they largely act as insurance for the customer - not the business owner.



Most federal, municipal, and even private hiring bodies will require that you carry some form of surety bond before you can begin any work. This is because a surety bond will ensure that, if something goes wrong, your bond provides the client with financial recourse.

  What surety bonds cover
  • Customer loss due to unethical business practices
  • Negligence or inability to fulfill the terms of a contract
  • Financial recourse
  What surety bonds do not cover
  • Commercial property losses
  • Losses covered by standard business insurance policies
  • Criminal activities

What is surety bond insurance?

Surety bonds, or surety bond insurance, are unlike regular insurance (and they shouldn’t be treated as a replacement for a business policy) in that they involve three parties and are designed largely to protect the customer. The construction and contracting sector in Canada may be required to carry surety bonds in order to do work with any federal, municipal, or even private hiring body. Surety bonds will offer financial compensation if a contract is not fulfilled by the business carrying out a project.

Surety Bond Insurance for These Business Sectors:

Surety bond insurance provides a critical purpose to numerous sectors, even though it’s commonly misunderstood. Surety bond differs from regular insurance, but it is just as important as any one business insurance policy. LMBF is proud to issue surety bond insurance to numerous industries and sectors within Canada. Read on for some examples of a few of the business sectors that may benefit from surety bond insurance, as well as some individual businesses.
Construction Industry


  • HVAC construction
  • Commercial construction
  • Residential construction
  • Demolition
  • Electrical installers
  • Highway construction
More info
Maintenance Industry

Maintenance Industry

More info
Manufacturing Industry


  • Metal manufacturers
  • Autobody part manufacturers
  • Chemical manufacturers
  • Food manufacturers
More info
Transportation Industry


  • Airlines
  • Freight road transportation
  • Courier companies
  • Railways
  • Trucking companies
More info
Retail Industry

Retail industry

  • Liquor retail
  • Grocery retailing
  • Furniture retailing
  • Garden supplies retailing
  • Auto parts retailers
More info
Wholesale Distribution Industry

Wholesale Distribution

  • Agricultural machinery wholesale
  • Audio and video equipment retailers
  • Bakery product wholesale merchants
More info

Our Surety Bond Insurance Partners

LMBF is proud to offer surety bond insurance coverage to a variety of enterprises in the construction, contracting, manufacturing, and other industries that require this critical protection. Thanks to its surety bond insurance partners, LMBF can help you secure a surety product that offers security for your client and credit for your business. Start with a free surety bond insurance quote for your enterprise.

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Looking to Purchase Surety Bond Insurance for Your Enterprise? Get Started With a Free Surety Bond Insurance Quote Below.

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Surety Bond Insurance Coverage: Some Frequently Asked Questions

A: Surety bond insurance is designed to protect the customer and offer financial recourse should the principal (i.e, your business) fail to carry out a promised service. Surety bonds can be used for both public and private projects, and may be mandatory depending on the hiring body.

A: Surety bonds are similar to insurance, but they’re more designed as insurance for the customer than for your business. They should not be treated as a replacement for business insurance as they won’t supply any coverage for your liability, property damage, or otherwise.

A: You may find that the cost of surety bonds range between 1% to around 15% of the total bond amount. If you purchase a $10,000 bond policy, for instance, you may expect to pay between $100 and $1,500. Premiums will generally be determined based on your business’ credit health and your application, but some policies will be issued with a fixed rate - depending on the provider.

A: With a regular insurance product, the agreement is between the insurer and the policyholder. With surety bond insurance, the agreement is between three parties: the surety, the obligee, and the principal. As the business owner, you are the principal. The obligee is your client.

A: Surety bond insurance bears very little resemblance to other insurance products, but it offers a similar end-result: peace of mind for you and for your client. Surety bond insurance can also supply credit for contractors. Even larger commercial construction projects will require a safety net, should anything go awry - which is why it helps to guarantee that the contractor can fulfill their obligations as decreed in their contract. Hence, the necessity for contract surety.

A: Most federal construction contracts will require surety bonds. Some provincial and municipal governments will have similar requirements, and you may find that the majority of private owners will also require surety bonds. Surety bonds are mostly mandatory (or at least highly recommended) because they guarantee that the contract will be completed according to the prior agreed upon terms.