Types of Bonds
Bid & Performance Bonds
- Bid Bonds: Guarantees that if you are awarded the job, you will enter into a contract at the determined price.
- Performance Bonds: Guarantees that you will faithfully perform the work or service in accordance with the terms and conditions on the contract.
Commercial Surety Bonds
*Most commercial establishments require bonds to maintain or operate their business, whether healthcare, retail sales or the pharmaceutical industry. The forms and types are too voluminous to list, but some of the most common are sales tax bonds and customs bonds.
Developer Site Improvement
- Subdivision Bonds: Municipalities often require a residential developer to post a subdivision bond, which guarantees that the necessary improvements are made before the project is turned over to the public.
- Site-Improvement Bonds: A site improvement bond guarantees that a developer of a commercial facility properly installs improvements to a structure or parcel, in accordance with applicable building codes.
Court & Fiduciary Bonds
- Court Bonds: These are any type of bond required to enable litigants to engage in legal proceedings. These bonds provide the parties to the litigation protection against the payment of court costs and judgments.
- Fiduciary Bonds: When the affairs of an estate need to be managed, courts will often require the party who is charged with carrying out the responsibilities to be bonded. It guarantees they will properly account for the assets and liabilities, and otherwise faithfully discharge the duties of the estate. The most common types are Administrator's and Guardians.
License & Permit Bonds
- License & Permit Bonds: These commercial bonds guarantee that an entity will operate under a permit granted in accordance with all applicable statutes.
- Examples of License & Permit Bond Types: Contractor License; Insurance Broker License; Mortgage Banker License; Mortgage Broker License; Motor Vehicle Dealer License; Roofer License; and Used Car Dealer License.
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