Surety bonds are required for many purposes — to run a business, to ensure ethical conduct, to enforce performance standards, and more. There are many types of surety bonds Georgia. These can be divided into four main categories:
- Contract Surety Bonds
These bonds are typically required in the construction industry from contractors, sub-contractors, and construction companies. Contract bonds are common in Federal and State construction projects. The bond is usually submitted along with the bid for a project. It ensures that the principal will carry out the construction as per the project details outlined.
The bond protects the State from any default by the construction company or the contractor. Since bonds are issued after a thorough vetting, the process of bonding itself ensures that only financially solvent companies are in the running. The different types of contract bonds include bid bonds, performance bonds, payment bonds, and maintenance bonds.
- Commercial Surety Bonds
These surety bonds Georgia are required in certain professions and businesses. The bond ensures that the business adheres to the rules and regulations of the industry. Some of the industries where a commercial surety bond is necessary are licensed contractors, lottery ticket distribution, liquor distribution, auto dealers, and notary publics.
The most important types of commercial surety bonds are license and permit bonds and mortgage broker bonds. Many of the commercial surety bonds are industry-specific, so before starting any business, or starting out as an independent professional, it is critical to see whether you need a commercial surety bond. Businesses operating across different industries will require multiple bonds.
- Fidelity Surety Bond
A fidelity bond protects a company against any fraud or malpractice by its employees. This is a kind of blanket bond, where one bond protects the entire company from the misconduct of any employee. This type of bond is required by companies that interact with the common public and thus need to be ethical and honest.
Companies that are typically required to buy this kind of bond include businesses that deal with money or make home visits – including banks, in-home service providers, and delivery companies. Fidelity surety bonds include business services bonds, employee dishonesty bonds, and ERISA bonds.
4. Court Surety Bond
This type of surety bonds Georgia is often bought voluntarily by plaintiffs and defendants in a court case. They can be required by law, but people often buy them to protect themselves against damages. A court surety bond protects the principal against any potential loss which would result from court proceedings. Court surety bonds include cost bonds, administrator bonds, guardianship bonds, and attachment bonds.