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Oracle RMS Insurance

Surety Bonds

Commercial Insurance — Oracle RMS Insurance

Surety Bonds

Meet bonding requirements for construction contracts, licences, and court proceedings with surety bonds arranged through Oracle RMS.

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A surety bond is a three-party agreement in which a surety company (the insurer) guarantees to an obligee (the project owner or government body) that a principal (your business) will fulfil its contractual or legal obligations. Unlike insurance, a surety bond is a credit instrument — if a claim is paid, the surety seeks reimbursement from the principal. Surety bonds are required for many construction contracts, government projects, licences, and court proceedings.

Who needs this coverage?

General contractors, subcontractors, construction companies, and businesses bidding on public or private projects that require bonding. Also required for many business licences, mortgage brokers, collection agencies, and court-related obligations.

Key coverages

  • Bid bonds (tender bonds)
  • Performance bonds
  • Labour and material payment bonds
  • Maintenance bonds
  • Licence and permit bonds
  • Court and fiduciary bonds
  • Subdivision and developer bonds
  • Supply bonds
  • Custom bonds

Frequently Asked Questions

What is the difference between a surety bond and insurance?
Insurance protects the policyholder against losses. A surety bond protects the obligee (the project owner or government) against the principal's failure to perform. If a bond claim is paid, the surety has the right to seek full reimbursement from the principal — unlike insurance, where the insurer absorbs the loss.
What is a performance bond?
A performance bond guarantees that a contractor will complete a project according to the contract terms. If the contractor defaults, the surety will either complete the project, hire a replacement contractor, or pay the obligee up to the bond amount.
What is a bid bond?
A bid bond guarantees that a contractor who wins a tender will enter into the contract and provide the required performance and payment bonds. It protects the project owner from contractors who submit low bids and then refuse to proceed.
How is surety bond capacity determined?
Surety capacity is based on the financial strength of your business — including working capital, net worth, backlog, and management experience. Unlike insurance, surety underwriting is a credit analysis. Maintaining strong financial statements is key to accessing adequate bonding capacity.
Can a small contractor get bonded?
Yes. Surety companies offer programs for smaller contractors and those with limited track records. The bond amount, premium, and collateral requirements will reflect the contractor's financial profile. Oracle RMS works with multiple surety markets to find the right fit.

Ready to review your coverage?

Speak with a licensed broker at Oracle RMS — by phone, video, or in person. We serve businesses across Canada.*

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* Commercial insurance services available across Canada, excluding Quebec.