Surety bonds simplified
There are many types of surety bonds, each with a different purpose. Surety bonds generally fall into these two categories:
- Contract bonds
- Commercial bonds
Individuals or businesses may be required to obtain a bond.
Bid, payment and performance bonds are examples of bonds typically required of contractors. A bid bond guarantees that if a contractor wins a bid on a project, he or she will provide a performance bond. A payment bond guarantees payment for laborers, subcontractors and material suppliers while a performance bond guarantees that the contractor will complete the contract according to the terms and conditions of the contract. Each of these types of bonds may be required on a given project.
Many individuals or businesses are required by municipalities to provide a bond to conduct an activity. Examples of commercial bonds are auto dealer bonds, contractor license bonds, farm labor contractor bonds, mortgage brokerage bonds, tax preparer bonds, talent agency bonds and waste haulers bonds.
Our member agents have access to numerous bond markets and can assist you in finding the right bond for your individual needs.