Types of surety bonds

• Title Bonuses
• Sales tax
• DMEPOS (medicare)
• License and permit
• Public officer
• Probate bonds and other court bonds
• Miscellaneous surety bonds
• Contract performance bonuses
• Dealer bonuses

License and permit

The license bonds guarantee that the Principal will comply with the applicable codes and regulations established by the Obligor. (The obligee is usually a government entity, such as a city, town, or state.)

Permission to grant bonds to Privilege.

The types include:

• Electrician license
• Plumber license
• General Contractor License
• Entry permit
• Permission to sign
• Sales tax

Example: Electrical contractors may be required to post a bond as part of their licensing requirements. The obligation of the same can specify that the contractor will follow the electrical codes established in that city, town or municipality.

The requirements and ordinance must be understood before it is written. The agent may ask you to obtain a copy of the ordinance or law specifying the requirements and a copy of the bond, if the obligee has his own.

Depending on the type of obligation, supporting documentation such as signatures, financial statements, and other supplemental information may be required.
Public officer

A Public Official guarantees that elected or appointed officials will faithfully carry out their functions. The amount, as well as the fees, are generally specified by statute or ordinance.

The types include:

• Treasurers
• Tax collectors
• Peace officers
• Judges
• Hunting and Fishing Licensing Agents
• Notaries.

It should be noted that not all public entities require the involvement of Public Officials.

Aspects of underwriting civil servant bonds include understanding the required duties of the officer, the reputation (character) of the officer, and the officer’s experience.
Probate Courts and Others

A will guarantees honest accounting and the faithful performance of duties by the trustees / trustees. These bonds are required by the courts or statutes as the estates of deceased persons, incompetent persons, and minors are established and administered. (For farms)

The types include:

• Administrator
• Executor
• guardian
• Conservative
• Trustee.

A bankruptcy or equity bond from a designated trustee may be required for the sale of real estate or for property in foreclosure, reorganization, or other litigation. This surety guarantees honest accounting and performance of your duties while managing and distributing assets as directed by the court.

Common types include trustees and trustees.

A court may require other bail bonds in cases where someone is seeking legal benefit or compensation. These bail bonds can be extremely dangerous. Specific supplemental information may be required.

The types include:

• Appeal
• Mandate
• Attachment bonds
• Link release.

Various bonds

Miscellaneous bail bonds include those that do not fit into any of the other bail categories. They are usually more dangerous obligations.

The types include:

• Public service payment guarantees
• Lost Security / Lost Instruments (Cashier’s Check, Stock Certificates and Municipal Bonds)
• Union Salary and Welfare.

The various bonds require a more extensive subscription because the guarantee for the obligee is monetary. In addition to the application, supporting information such as signatures, financial statements, and other supplemental forms are generally required.
Contract performance guarantee

Simply put, contractual surety guarantees the performance of a written contract in accordance with its terms and conditions.

Types of contractual bonds:

• Offer bonus
• Performance jump
• Payment bond

A bid bond ensures that if a contractor is the lowest bidder on a project, they will enter into a contract and provide a performance bond.

A performance bond guarantees that the contract will be completed in accordance with its terms and conditions.

A bond of payment guarantees the payment of the workers, subcontractors and suppliers of materials.

Example: An electrical contractor may need contractual bonds to guarantee performance of the construction contract or to guarantee the supply of goods and materials. Most public works projects required bidding, performance, and payment bonds from the contractor. These bonds will guarantee the performance of the contractor in accordance with the terms of the contract with the project owner.

Frequent questions

What is a surety bond?

Definition: In the simplest terms, a surety is a guarantee. What the bond guarantees varies depending on the language of the bond. It is a form of credit, not insurance.

What is the process for obtaining a bond?

To start the process it is necessary to submit an application. Your agent will generally have an approval for you from the same day up to 4 business days. You will then be given the cost of the premium and an agreement between you and the surety company. The bond is then issued 1-2 business days from receipt of payment and agreement (the original agreement is often required).

How do bonds work?

The principal (you) pays a percentage of the bond amount called the bond premium. In return, the surety extends a “surety credit” to make the required guarantee (the surety). A claim can arise when the principal fails to meet the terms of the bond. In the event of a claim, the deposit will be investigated to make sure it is valid. If the claim is valid, the bond will seek the payment of the principal
of the claim and associated legal fees.

What good is a bond if I have to pay claims?

A surety bond is not insurance, it is a form of credit in which the principal (you) is responsible for paying any claim. The alternative to a surety is to deposit cash or a letter of credit. Surety bonds are advantageous, as they usually do not require collateral, which frees up capital. Bond premiums are also similar to letter of credit fees and are typically less than what you would earn by investing conservatively with your available capital.

How much do bonds cost?

Bond premiums vary widely depending on the applicant, type of bond, bond, and obligee. Like other forms of credit, not everyone receives the same rate. Standard market rates typically range from 1% to 3%, while riskier markets can range from 5% to 20% of the bond amount.

Why do I need a bond?

Simply because a government authority or private entity requires the surety for you to operate. The link assures you that it will follow your guidelines.

Who is the obligor?

The obligee is the one who is requesting your bond. You are not the obliged one. For example, the obligee of a contractor would be whoever is doing the work. The obligee of a license bond (for example, a car dealer or mortgage broker) would be the person with whom you are presenting your license.

What is a blank bond form and where can I get one?

It is a blank copy of the bond that you must post. It says exactly what the bond guarantees. Your bonding agency will use it to create the original bond by filling in the blanks on the form, signing on behalf of the bond, and attaching a power of attorney. You should obtain a blank copy of the bond form from the obligee.

What is the response time?

The approval time varies depending on the type of bond and the program the applicant belongs to. Some are approved immediately, others may take 1-4 business days. The issuance of the bond is typically 1 to 2 business days from receipt of payment and anything else required by the bond for the issuance of the bond.

Why does my spouse have to sign the severance agreement?

Bail bond companies have several reasons why they would like your spouse to personally guarantee the bond. Keep in mind that a surety is a guarantee of something. The surety company does its best to underwrite your policy, but has no way of assessing its character. A good way to do this is to have your spouse personally guarantee it, as he or she knows you best. Spouses must also sign, as married couples have joint assets, which may have to be sought in the event of a claim.