SALVAGE:
That which is recovered from the principal or an indemnitor to offset in
whole or in part the loss and expense incurred by a surety in satisfying
obligations it has sustained under a bond.
SCHEDULE BOND:
One that covers loss resulting from dishonest or fraudulent acts of
employees who are listed either by name or by positions scheduled in the
bond.
SEQUESTRATION BOND:
Substantially the same as Attachment Bond - Plaintiff's.
SHORT RATE - SHORT RATE
CANCELLATION: The
charge required for bonds taken for less than a year, and in some cases,
the earned premium for bonds cancelled by the insured before the end of
the term of the bond; i.e., the earned premium plus an expense charge.
SHORT TERM BONDS:
Those covering fiduciaries whose duties are to collect the assets of the
decedent, pay the debts, and distribute the remainder according to law.
These bonds are usually less than two years duration.
STATUTORY BOND:
A term generally used describing a bond given in compliance with a
statute. Such a bond must
carry whatever liability the statute imposes on the principal and the
surety.
STAY OF EXECUTION:
A bond to stay or suspend execution on a judgment. It guarantees the
payment of the judgment upon termination of the stay.
SUBCONTRACT BOND:
One required by a general contractor of a subcontractor, guaranteeing
that the subcontractor will faithfully perform the subcontract in
accordance with its terms and will pay for labor and material incurred
in the prosecution of the subcontracted work.
SUBDIVISION BOND:
Many municipalities provide by ordinance that a developer who undertakes
to lay out a housing or industrial subdivision shall give bond with
surety to guarantee that, within a specified time, improvements on the
property, such as streets, sidewalks, curbs, gutters, and sewers will be
constructed.
SUBROGATION:
The legal or equitable process by which a surety company obtains from a
third party recovery of an amount paid out by the surety to the obligee
or a claimant under the bond.
SUPERSEDEAS BOND:
This is a bond to supersede or take the place of a judgment, and
coverage is substantially the same as under a defendant's appeal bond.
SUPERSEDED SURETYSHIP:
When a company writes a bond to take the place of another bond which is
cancelled on the effective date of the new bond, a rider is generally
attached (unless the bond itself contains a superseded suretyship
provision) agreeing to pay losses that would have been recoverable under
the first bond except for the expiration of the discovery period.
SUPPLY BOND:
A bond which guarantees faithful performance of a contract to furnish
supplies or materials. In
the event of a default by the supplier, the surety must indemnify the
purchaser of the supplies against the loss occasioned thereby.
SURETY BOND:
An agreement providing for monetary compensation should there be a
failure to perform specified acts within a stated period.
SURETYSHIP:
Refers to obligations to pay the debts of, or answer for, the default of
another. It assumes a legal
relationship based upon the contract in which one person (the surety)
undertakes to answer to another (the obligee) for the debt, default, or
miscarriage of a third person (the principal) resulting from the third
person's failure to pay or perform as required by an underlying
contract.
TERM:
A period of time for which a bond is issued.
TESTATOR:
One who makes a will.
THIRD PARTY BOND:
A license bond which gives parties other than the named obligee a right
of action in their own name to recover loss or damage resulting from a
breach by the licensee of his/her obligations under the law, ordinance
or regulations under which the bond is required.
TREASURY LIMITS:
These are qualifying limits imposed upon surety companies by the United
States Treasury Department.
TRUSTEE:
One named in a will or deed of trust to manage property for the benefit
of another.
UNDERWRITER:
An officer or employee of a surety company who has the responsibility
for accepting risks.
UNEARNED PREMIUM:
That part of the premium which has not yet been earned by the surety for
the unexpired portion of the term of the bond.
