A look at different types of Commercial Surety Bonds
Commercial Surety Bond, which is also a type of surety bond, is primarily put in place to make sure that individuals, or group of individuals, or business entities getting into a project contract, follow complete compliance with all the conditions put down in the agreement. In case if the condition of compliance is not met due to some unforeseen circumstances, then the bond money deposited by the party involved is utilized in compensating the other parties working on the project.

In a majority of the cases in US, these bonds are actually mandated by agencies of the government having their operations run on a national, state and local level. The primary purpose of putting these bonds in place is to offer financial security to all the parties involved during financial transactions, a financial assurance by businesses to the government agencies, and also ensuring the safety of the end customers from cases of scam, misrepresentation and non-compliance.

Presently, there are 5 types of commercial surety bonds in use in US. They are:

License & Permit Bonds are for compliance with National, state or local regulations before doing business in that region.
Federal Non-Contract Bonds are for compliance with the federal government for doing business across the country.
Public Official Bonds are for compliance of duties assigned to a public official.
Fiduciary Bonds are for compliance with the prescribed court guidelines.
Subdivision Bonds are for compliance with the conditions of the agreement.

Commercial Surety Bonds in US are mostly required by professionals and businesses that want to run their business operations on a License. If you wish to gather more information about the different types of commercial surety bonds and why are they needed, you can also look at the Infographic on the topic “types-of-commercial-surety-bonds-explained” provided underneath.



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