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Common Surety Questions

Q: What is a surety bond?

A: A surety bond is an agreement in which the surety company guarantees the principal will fulfill a commitment made to the obligee.

Q: What is a contract bond?

A: A contract bond usually consists of a performance and payment bond. The performance bond guarantees the principal will complete the job to the specifications made in the contract between the principal and obligee. The payment bond holds the principal responsible for paying certain subcontractors, laborers, and suppliers associated with the job.

Q: What is a bid bond?

A: A bid bond is a financial assurance that a bid has been submitted ingood faith and the contractor will enter into a written contract.

Q: What is a commercial bond?

A: Commercial surety bonds are also sometimes called Noncontract Surety Bonds. These bonds are an agreement between a principal and an obligee that a certain obligation will be performed. The agreement usually states the principal (also known as the licensee) will conform to the ordinances or laws relating to the business they are engaged in. Commercial Surety bonds are comprised of License Permit, Notary, Financial Guarantee, Public Official, Probate, and Court Bonds.

Our Underwriting Philosophy

    • Net worth underwriters.
    • Clean, personal credit reports. Some Commercial Surety bonds are written solely based on a clean credit report.
    • Every case is underwritten on its own merit.

Q: What is a Court Bond?

A: Court Bonds are a product of a court ordered action.

Our Underwriting Philosophy

    • Properly completed commercial bond application
    • Copy of court papers
    • Financial statement
    • Clean credit reports
    • Some of the court bonds will require cash collateral

We write court coverage on:

    • Cost Appeal/Supersedeas
    • Attachment
    • Replevin
    • Sheriff Indemnity
    • Lien
    • Release of Lien
    • Receiver
    • Injunction

Q: What is a Probate Bond?

A: Probate Bonds are required by a court to ensure the proper handling of an individual's finances or estate.

Our Underwriting Philosophy

    • Properly completed commercial bond application
    • Copy of court papers relating to the case
    • Clean personal credit reports
    • Financial information

We write probate coverage on:

    • Guardianships/Conservatorships of Incapacitated Person
    • Guardianships/Conservatorships of Minors (joint control usually required)
    • Trustees
    • Referees
    • Administrators
    • Executors
    • Receiver

Q: How do I submit a Claim?

A: To submit a claim, please do so in writing and, if possible, refer to the bond number and name of the bonded principal. The claim should include copies of all relevant documents, such as invoices, to support the claim.

Claim letters and relevant documentation should be submitted to:

Merchants Bonding Company

Attention: Claims

P.O. Box 14498

Des Moines, Iowa 50306-3498


The claim will be forwarded to Merchants claims personnel and will be handled in accordance with appropriate statutes and regulations. To check on the status of a claim, please phone 515-243-8171 and request to speak with the adjuster handling your claim.