Why do I need a surety bond for my business?
- As a business owner, you may need a surety bond to guarantee payment for state sales taxes or utility bills.
- Or as a contractor, you may need to post a license or permit bond to guarantee your work for licensing requirements with municipalities.
- Attorneys may have clients that are required to post court bonds such as administrators or executors bonds to guarantee their performance while distributing assets in estate situations.
- Notary publics are required to post bonds in most states.
Types of Surety Bonds
License bonds guarantee the Principal will comply with applicable codes and regulations established by the Obligee (The Obligee is usually a government entity such as a City, Town, or State). Permit bonds grant a Privilege.
- Electrician’s license
- Plumber’s license
- General Contractor’s license
- Driveway permit
- Sign permit
- Sales tax
The requirements of the bond and ordinance must be understood before the bond is written. The agent may ask you to obtain a copy of the ordinance or law that specifies the requirements and a copy of the bond, if the Obligee has its own.
Depending upon the type of obligation, supporting documentation such as signatures, financial statements, and other supplemental information may be required.