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Tag search results for: "commercial surety bonds"
caitlynwilliams

A bond is a type of insurance, issued by insurance companies called sureties which guarantee that the specific tasks will be fulfilled. It serves as a risk mitigation tool for states and localities.


For state regulatory agencies, commercial surety bonds are required before a company can be licensed to do business in an industry, providing protection against fraud, misrepresentation, and compensation of monetary loss. These bonds are required by federal and state courts. Commercial surety bonds can be used to guarantee performance of non-construction related contractual obligations. This type of guarantee is essential.


Types of Commercial Surety Bonds

Public official bonds

Public official bonds are the surety bonds that guarantee the performance of duty by a public official. Some popular types of public official bonds include treasurer bonds, tax collectors bonds, sheriffs bonds, judges bonds, court clerks bonds and notaries bonds.


License and permit bonds

License and permit bonds are often required by government and include all types of surety bonds. To give a few examples, a bond might be required to obtain contractors bonds, motor vehicle dealers bonds, sales tax bonds, employment agencies bonds and so on.


Judicial bonds

Judicial bonds also known as fiduciary bonds are generally used to describe different types of bonds that may involve court proceedings. Some of the most popular types of judicial bonds include administrators, executors, guardians, trustees, etc. These bonds defend the participants in legal matters.


Subdivision Bonds

This bond, guarantees their obligation to install improvements, such as - streets, sidewalks, curbs, gutters, sewer, drainage systems, etc.


Here is an infographic, which is meant to shortly describe each type of bond with examples.  Getting informed about the bonds can save a lot of time and trouble when closing a contract. Bonds are recommended as per the situation. 



caitlynwilliams

Commercial surety bonds are required by government agencies in the federal, state or local levels. They are meant to provide financial protection to all parties in a transaction and to protect the interests of the public at large. There are different types of commercial bonds: 


• Federal non-contract bonds – These bonds are required in federal government transactions. Common examples are Medicaid and Medicare bonds, customs, immigrants, excise and alcoholic beverage bonds.


• Public official bonds – It guarantees the performance of duty by a public official. The purpose of the bond is to ensure that there is no misuse of power by powerful public officers. It also ensures that they perform their duties in a faithful, honest and ethical manner. Public officials who have to submit such bonds include treasurers, tax collectors, sheriffs, judges, court clerks and notaries. 


• Judicial bonds – Also known as fiduciary bonds, they secure the performance of fiduciaries’ duties and compliance with court orders. Judicial bonds are meant to ensure that non-compliance with the court’s orders are penalized. People expected to buy a judicial bon include administrators, executors of wills, liquidators, and receivers. Judicial court bonds include injunctions, appeals, mechanics lien, indemnity to sheriff, attachment, replevin and admiralty. 


• License and permit bonds – These are generally required by state law or local regulations in order to obtain a license or permit to engage in a particular business. It could be required of organizations, businesses or professionals like contractors, motor vehicle dealers, security dealers, employment agencies, health spas, grain warehouses, or liquor-based businesses. 


• Subdivision bonds – The bond represents a guarantee to a city, country, or state that the principal will finance and construct certain improvements. This can include developments like sidewalks, curbs, gutters, swears or drainage systems. 


• Miscellaneous bonds - This includes all other commercial surety bonds like lost securities, lease, and guaranteed payment of utility bills. 




caitlynwilliams
Commercial surety bonds are required by the Federal, state or local government agencies in commercial transactions. The purpose of the bond is to safeguard the customers from fraud, misrepresentation or non-performance. It asks for financial assurance from businesses at various levels of the government. It provides financial protection to the parties in a commercial transactions.

The main types of commercial bonds are:

• Federal non-contract bonds – These are required by the federal government from professionals like Medicaid and Medicare providers, customs, immigrants and excise personnel.

• Public official bonds – These are required from public officials, such as treasurers, tax collectors, sheriffs, judges, court clerks and notaries. The bond guarantees that the official will discharge his/her duties as per the rules.

• Judicial bonds –
These commercial surety bonds are meant to secure the performance of fiduciaries’ duties and compliance with court orders. Judicial court bonds are typically required in injunctions, appeals, indemnity to sheriff, mechanic’s lien, attachments, replevin and admiralty.

• License and permit bonds –
These bonds are necessary for obtaining a license or permit to engage in a particular business or profession, such as contractors, motor vehicle dealers, security dealers, employment agencies etc.

• Subdivision bonds – These bonds guarantees that the principal will finance and carry out certain improvements to state properties, such as sidewalks, curbs and gutters.

Factors that decide a commercial surety bonds cost:

Type: Different types of bonds have different costs. A surety will take into account the bond you are buying before fixing a cost.


Risk: A bond is also a risk for the surety. So, the cost will take into account the risk posed by the bond.


Term: The total time-span covered by the bond.


Financial & professional history: This is often the most important factors in deciding the cost of a commercial surety bond. The surety will check your history of discharging similar duties as well as your financial stability when determining the cost of the bond.


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