Surety bonds are a type of financial guarantee that provide additional security on behalf of an escrow entity. They are used in a variety of cases, such as the requirement to obtain a license or to obtain construction contracts. There are three main types of surety bonds that are widespread in the U. S.: license and permit bonds, contract bonds, and court bonds.
License and permit bonds, also known as commercial bonds, are the most common type of bond required of individuals and businesses. If you want to obtain a professional license as a car dealer, freight forwarder, or one of the other trades, you may need to deposit a license bond. The bond is one of the requirements established by the licensing authority. The cost of your bond depends on the amount of the bond you need to deposit and your current financial statement.
Contract bonds are needed for individual projects when construction contractors are bidding for public and private construction works. The purpose of contact bonds is to ensure that the bonded contractor complies with his contractual obligations under the project and will perform all work on time and in accordance with the contracted standards. The three most common types of contractual bonds are offer bonds, performance bonds, and payment bonds. Court bonds are only needed in specific circumstances and are required by a court.
For example, if you want to appeal a case to a higher court, you may have to obtain an appellate bond, also known as substitute bond. If you are appointed as a trustee, meaning that you need to have control of someone else's assets, property, or affairs, you may need to deposit a trust bond, also known as an estate bond. Compliance bonds are often required for large public construction projects that are financed with taxpayer money or for large contracts that require funding from a banking institution. Obtaining your license bond is a simple process. You can apply online and get a free bond quote today.
Subscribing for license bonuses is quite fast, so you can expect to have your deposit in a few days. As professional licenses are issued for a limited period of time, normally one or two years, they must be renewed. This ensures continued legal compliance by authorized parties. Ultimately, surety bonds provide a guarantee that the project will be completed according to the contract and, if not, compliance bonds provide the funds to complete the project in case the contractor defaults. While these bonds are often expensive, they provide an important layer of protection for creditors and their counterparties.
