Let’s be clear…Bonds are not insurance policies!  They’re guarantees - usually a financial guarantee of some type.  There are many types of Bonds -- most fall into one of several categories.

Surety Bonds guarantee performance or fulfillment of an obligation and are common in construction projects where the owner must be absolutely assured that the project will be completed in accordance with terms of the contract - no matter what complications may arise.  A Surety Bond is a contract between at least 3 parties:

• The obligee - the party who is a recipient of the obligation (the owner of the building or road to be constructed)
• The principal - the primary party who will be performing the contractual obligation (the contractor responsible for the work), and
• The surety - who assures the obligee that the principal can perform the task (usually an insurance company or bonding company)

Business Services Bonds are a third-party bond to protect your customer against dishonest acts of your employee.  They are commonly used whenever a business has access to their customer's premises.  Some examples of companies that need a Business Services Bond include janitorial, service & repair contractors and locksmiths.

License & Permit Bonds are required by certain federal, state, or municipal governments as prerequisites to receiving a license or permit to engage in certain business activities. These bonds function as a guarantee from a Surety to a government and its constituents (Obligee) that a company (Principal) will comply with an underlying statute, state law, municipal ordinance, or regulation.  A few examples of License & Permit Bonds include contractor's license bonds, customs bonds, and ERISA bonds.

Court Bonds are those bonds prescribed by statue and relate to the courts. They are further broken down into judicial bonds and fiduciary bonds.

• Judicial bonds arise out of litigation and are posted by parties seeking court remedies or defending against legal actions seeking court remedies. Examples of judicial bonds include appeal bonds, supersedeas bonds, attachment bonds, replevin bonds, injunction bonds, Mechanic's lien bonds, and bail bonds.
• Fiduciary, or probate, bonds are filed in probate courts and courts that exercise equitable jurisdiction; they guarantee that persons whom such courts have entrusted with the care of others’ property will perform their specified duties faithfully.  Examples of fiduciary bonds include administrator, guardian, and trustee bonds.

Public Official bonds guarantee the honesty and faithful performance of those people who are elected or appointed to positions in government. Examples of officials sometimes requiring bonds include: notaries public, treasurers, commissioners, judges, town clerks, and law enforcement officers.

Fidelity Bonds, also known as employee dishonesty coverage, cover theft or embezzlement of an employer's property by its own employees. Though referred to as bonds, fidelity coverage functions more like a traditional insurance policy rather than a surety bond. 


Be sure to ask us about other important parts of your insurance program, including: Commecial Auto; General Liability; Commercial Property; Workers Compensation; Umbrella Liability;  Employee Benefits; Bonds.

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