- License Bond
- Definition: type of commercial surety bond required by governmental regulatory authorities usually in the form of a license to engage in the activities they regulate
- Permit Bond
- Definition: Required by state law, municipal ordinance, or by regulation and in some instances by the federal government or its agencies to guarantee that a contractor who has been issued a permit complies with the laws and ordinances regulating the privilege for which the permit was issued
- Street Opening Bond
- Definition: Required if a street is being disturbed by construction
- Each municipality, state, or government party requires the bond in a unique and specific format
- The Obligee determines the dollar amount to assure that the street is brought back to pre-construction form and that the improvements hold for the maintenance period in case the applicant does not fulfill their obligation to complete and maintain the street opening/improvements
- Subdivision Bond
- Definition: Ensures that the subdivision’s improvements will be made according to the governing body’s engineer’s letter of instruction outlining the improvements
- Notary Bond
- Definition: Protects those who work with notaries from fraud and any other errors related to their work and deters notaries from unethical conduct while performing their duties
- Serves as a risk management tool
- If a notary makes a mistake, a claim can be filed against the bond so that the Obligee can receive financial reparation
- Mortgage Broker Bond
- Definition: Protects the consumer in the event of wrongful practices or fraud on the part of a lender or broker
- Wrongful practices include:
- Knowingly approving a borrower for a loan for more than he or she can afford to repay
- Encouraging a buyer to commit fraud on an application
- Putting pressure on buyers into purchasing certain loan products
- Establishing an interest rate on the basis of anything other than the borrower’s credit history
- Charging unnecessary or additional fees
- Deliberately going after vulnerable or at-risk buyers and suggesting cash-out refinances
- The amount of the bond depends on the average amount of mortgage loan volume serviced in a year and the state in which business is conducted
- Motor Vehicle Dealer Bond
- Protects consumers against fraudulent actions by an auto dealership and requires compliance by the auto dealer with all laws and tax regulations
- Sales Tax Bond
- Guarantees that a business (such as a car dealership) will pay the anticipated sales taxes on yearly acquisitions/sales
- Considered a financial guarantee surety bond obligating the Surety to pay a certain amount of money at a future date if the Principal fails to pay collected funds to the Obligee or if there is incorrect reporting
