What is a surety bond, and why do I need a Street Obstruction Bond?
A surety bond is a three-way promise made between the Principal (the bondholder), the Obligee (in this case, the City of Puyallup, Washington), and the surety company that backs the bond. Unlike an insurance policy, a surety bond protects the Obligee, not the bondholder. Your Street Obstruction Bond protects the City of Puyallup, as well as the general public, from any financial liabilities that may arise from any permitted work being performed in the Puyallup right of way. If you or your company is performing such work, the city requires that you file this bond. Any application to the City Engineer of the City of Puyallup for a Street Obstruction Permit(s) to ‘take up, break, excavate, tunnel, undermine, cut, or in any way obstruct or disturb any public properties in the city’ requires a Street Obstruction Bond before the permit is issued.
The amount of this bond is $10,000, but you are only required to pay a percentage of the amount, known as a premium. Premiums for a Street Obstruction Bond are as follows:
- 1-year bond – $107.50
- 2-year bond – $188.13
- 3-years – $268.75
This bond is an “Instant Bond,” meaning there is no credit check or variable rates. After you submit your application and payment, your bond will be issued within 1-3 days.
If, during the course of your work on a Puyallup right of way, there are any damages or liabilities that occur, the city of Puyallup and the general public are free of any obligations to the aggrieved party. Your surety company will pay the damages initially, at which point you are responsible for complete repayment of the damages to your surety, plus any associated fees that may occur. It is important to understand the terms of your permit, to be sure your employees understand the terms, and that you avoid any claims against your bond. In the event of a claim, your surety company may revoke your bond. If your bond is revoked, your permit will be considered invalid, and you will be unable to continue your work until obtaining a new bond and reinstating your permit.
A claim against your bond acts like a mark against your “credit,” and a history of claims against your bond will complicate any future applications. Just as it is very important to follow the terms of a permit you are issued, you must do the same to maintain your surety bond.
1-year bond - $107.50
2-year bond - $188.13
3-years - $268.75
Your bond is good for the amount of $10,000 each year.