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:
The four sub-types are: 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). So that a company (Principal) will comply with an underlying statute, state law, municipal ordinance or regulation.
These are bonds that prescribed by statute and relate to the courts. And judicial bonds and fiduciary bonds are types of Court 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.