There are many different kinds of bonds, so let’s start with some easy definitions of each type.
Surety bond: An umbrella term for any kind of bond that protects the recipient against loss in the event that the terms of the contract are not fulfilled. Contract bonds are a type of surety bond.
Contract bonds offer a guarantee by the surety company that the terms of a contract are fulfilled. For instance, if a contractor goes out of business before it completes a project, the surety company is responsible to see that the project is completed.
Government entities often require its contractors to be bonded to bid and complete its projects.
General Business bonds are most commonly license and permit bonds. These guarantee the business owner’s honesty, integrity, performance, and payment. In most cases, license and permit bonds are required by municipalities as a contingency for renewing a business license.
Court bonds, also known as judicial bonds, protect the court from a loss (most often a financial loss). The most common court bonds are probate or executor bonds. These are required of the executor/executrix who is responsible to distribute the assets of an estate in an honest fashion.
Fidelity bonds are not technically bonds in how they are structured, but they are commonly referred to as bonds. These types of bonds protect an insured against fraudulent acts by certain individuals. Most common are employee dishonesty bonds, which protect the business from dishonest or fraudulent acts by its employees.
Our specialty is in contract bonds, so read on for more information about our capabilities and our expertise.