The bonds which do not fit under contract are termed as commercial bonds. Six of these commercial surety products are described below.
License & Permit Bonds: These bonds are needed in order to carry out a business activity that needs a permit from the state or federal government. These bonds act as the guarantee that the Principal will act in accordance with the rules and regulations of the state government. Businesses such as motor vehicle dealers, employment agencies, and liquor dealers need these bonds to get a permit.
Judicial Bonds: These bonds are issued to make sure the Principal performs in accordance with the orders of the judiciary. These bonds are also known as probate or fiduciary bonds. These bonds are purchased by administrators, guardians, trustees and will executors. The executor has to act ethically according to the wishes of the deceased, if not then this bond will compensate the affected people.
Miscellaneous Bonds: They are bought to support distinctive business needs. Lost securities, lease, wage and welfare benefit bonds are some of the examples of Miscellaneous Bonds.
Subdivision Bonds: It is a guarantee that the Principal will construct the improvements such as sewers, gutters and streets in a city or a state.
Federal Non-Contract Bonds: These bonds are required by the federal government such as Medicare and alcoholic beverages.
Public official bonds: These bonds are bought to check that public officials will fulfill their services as expected. The whole purpose is to guard the taxpaying citizens and reimburse them in case public officials are involved in any misconduct.
