Build trust with Surety Insurance.

Win contracts, and meet requirements with the right surety bond.

Surety insurance is an important tool for many Ontario businesses that need to demonstrate trust, credibility, and compliance.

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What Is Surety Insurance?

Surety insurance (also known as a surety bond) is a financial guarantee that your business will meet its obligations under a contract, licence, or regulation. A surety bond involves three parties:

Principal

Your business,

Surety

The insurer guaranteeing your obligations.

Obligee

The party requiring the bond

If you don’t fulfill your obligations, the surety may step in to compensate the obligee, which helps to protect your clients and partners.

Surety Insurance Supports Business Growth

Surety insurance isn’t just about meeting requirements—it’s a growth tool. For many Ontario small businesses, surety bonds are the bridge between where they are now and where they want to go.

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Who Needs Surety Insurance?

Surety insurance (often called a surety bond) is designed for businesses and individuals who need to guarantee their work, fulfill contractual obligations, or comply with legal or regulatory requirements.

You may need surety insurance if your business is expected to provide financial assurance that a job or obligation will be completed as promised.

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Contractors and Construction Companies

Surety bonds are most commonly required in the construction industry. Contractors often need bonds to:

  • Bid on projects (bid bonds)

  • Guarantee project completion (performance bonds)

  • Ensure subcontractors and suppliers are paid (payment bonds)

Many public projects in Ontario require contractors to be bonded before work begins.

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Developers and Builders

Developers may need surety bonds to meet obligations with municipalities, such as:

  • Completing infrastructure (roads, sewers, sidewalks)

  • Meeting zoning or permitting requirements

Municipalities often require bonds as a condition of approval for development projects.

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Businesses Requiring Licences or Permits

Certain industries must obtain surety bonds to operate legally. This can include:

  • Auto dealers

  • Mortgage brokers

  • Travel agencies

  • Collection agencies

These bonds help protect consumers and ensure businesses follow regulations.

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Professional Service Providers

Some professionals may need surety bonds as part of licensing or contractual obligations, including:

  • Notaries

  • Insurance brokers

  • Financial advisors

These bonds help demonstrate financial responsibility and compliance.

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Freight, Logistics, and Transportation Companies

Transportation businesses may require surety bonds to:

  • Obtain operating authority

  • Guarantee payment of duties or compliance with regulations

This is especially common for cross-border or regulated operations.

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Businesses Working on Government Contracts

If your business works with federal, provincial, or municipal governments in Ontario, you’ll likely need surety bonds to:

  • Qualify for tenders

  • Secure project awards

  • Demonstrate reliability and financial stability

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Property Managers and Tenant-Focused Businesses

In some cases, bonds may be required to:

  • Protect client funds

  • Guarantee lease obligations

  • Meet regulatory standards

We make surety simple so you can focus on growing your business.

Surety insurance helps small businesses in Ontario demonstrate reliability, meet contract requirements, and secure opportunities that would otherwise be out of reach. Whether you’re bidding on a project, applying for a licence, or working with a municipality, a surety bond shows that you stand behind your work.

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Surety
FAQs

  • Surety insurance (or a surety bond) is a financial guarantee that your business will meet its contractual, legal, or regulatory obligations. It involves three parties:

    • Principal (you, the business purchasing the bond)

    • Obligee (the party requiring the bond)

    • Surety (the insurer providing the guarantee)

    If you fail to meet your obligations, the surety may compensate the obligee—then seek reimbursement from you.

  • Unlike traditional insurance, which protects you from losses, surety bonds are designed to protect a third party (such as a client, municipality, or regulator).

    With a surety bond:

    • You remain financially responsible if a claim occurs

    • The bond guarantees your performance or compliance

  • Surety bonds are often required by:

    • Government agencies (federal, provincial, municipal)

    • Project owners and general contractors

    • Licensing bodies and regulators

    If you’re bidding on public projects, applying for licences, or entering into contracts, you may need a bond.

  • Common types of surety bonds include:

    • Bid bonds – guarantee you’ll honour your bid on a project

    • Performance bonds – guarantee the project will be completed as agreed

    • Labour & material payment bonds – ensure subcontractors and suppliers are paid

    • Licence & permit bonds – required to operate in regulated industries

    • Commercial bonds – cover a range of business obligations

  • You may need a surety bond when:

    • A contract requires financial guarantees

    • A government entity mandates it

    • You need to qualify for a project or licence

    • You’re responsible for completing work or safeguarding funds

    In many cases, you’ll know you need a bond because it’s specified in the contract or application requirements.

  • The cost of a surety bond depends on factors such as:

    • Your business’s financial strength

    • Industry and experience

    • Type and size of the bond

    • Project risk level

    Premiums are typically a small percentage of the total bond amount.The cost of a surety bond depends on factors such as:

    • Your business’s financial strength

    • Industry and experience

    • Type and size of the bond

    • Project risk level

    Premiums are typically a small percentage of the total bond amount.

  • If a claim is filed:

    1. The surety investigates the claim

    2. If valid, the surety may compensate the obligee

    3. You are required to repay the surety for any losses or costs

    This is why financial stability and credibility are key when obtaining surety insurance.

  • Many small businesses in Ontario need surety bonds, especially in industries like construction, transportation, real estate, and financial services.

    Even smaller contracts or licences can require bonding.

  • To obtain a surety bond, you typically need to:

    • Provide business and financial information

    • Demonstrate experience and reliability

    • Work with a licensed insurance broker

    A broker can help you find the right bond and guide you through the application process.

  • Some simple bonds (like licence or permit bonds) can be issued quickly—sometimes within a day. More complex bonds (like construction bonds) may take longer due to underwriting requirements.