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The Different Types of Commercial Surety Bonds from caitlynwilliams's blog

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. 

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