Commercial bonds represent the broad range of bond types that do not fit the classification of contract. They are generally divided into four sub-types:
They are generally divided into four sub-types: license and permit, court, public official and miscellaneous.
License and Permit Bonds
License and permit bonds are required by certain federal, state or municipal governments as prerequisites to receiving a license or permit to engage in certain business activities. These bonds function as a guaranty from a Surety to a government and its constituents (Obligee) that a company (Principal) will comply with an underlying statute, state law, municipal ordinance or regulation.
Court bonds are those bonds prescribed by statute and relate to the courts. They are further broken down into judicial bonds and fiduciary bonds.
Public Official Bonds
Public official bonds guaranty the honesty and faithful performance of those people who are elected or appointed to positions of public trust.
Miscellaneous bonds are those that do not fit well under the other commercial surety bond classifications. They often support private relationships and unique business needs.