Commercial bonds help provide peace of mind that all parties are protected.

Commercial Surety Bonds for your business

What are commercial bonds?

Commercial bonds, also called surety bonds, are different from insurance. Rather than protecting your business, a commercial bond provides financial protection to the party requiring the bond if contractual or legal obligations are not fulfilled.

Many businesses are required to obtain commercial bonds before they can perform certain work, obtain a professional license, or bid on government and construction projects. Requirements vary by industry and by state, county, or city.

Common types of commercial bonds include:

License & Permit Bonds

Many local, state, and federal agencies require businesses to obtain license and permit bonds before issuing a business license or permit. For example, auto dealerships often need an auto dealer bond before selling vehicles. These bonds help protect consumers by guaranteeing that businesses comply with applicable laws, regulations, and licensing requirements.

Bid Bonds for Contractors

Bid bonds are usually used solely by contractors and construction businesses. Project developers often require contractors bidding on a project to purchase a bid bond in order to protect their interests. Before bid bonds were often required, some contractors would bid low to gain the contract and then raise the price once work had started or dropped out of the project altogether, resulting in problems for the project developer. Now, with bid bonds, project developers can feel better about the contractors they choose, as bid bonds guarantee that contractors are financially sound enough to complete projects and that the bids they place are serious and competitive.

Performance bonds are the follow-up to bid bonds.

As a contractor or construction company, you’ve gotten your bid bond, you’ve placed your bid, and now you’ve been awarded the project. That means more business for you, but that also means you’ll need to look into a performance bond. Developers often require performance bonds as a way to protect the investment they’ve made in the project. This type of bond guarantees that you as the contractor will complete the project as agreed in the contract. Rates for performance bonds depend on a number of factors, including the bid amount and past jobs that you’ve done.

Lost instrument bonds help everyone get the money they need.

You’ve just gotten a cashier’s check, a money order, or even a stock certificate, and now you can’t seem to find it. Often, financial institutions will require you to get a lost instrument bond before issuing a replacement. These bonds guarantee that if the original lost instrument—cashier’s check, money order, or stock certificate, for example—is ever found, you as the bonded party won’t be able to cash it in addition to the duplicate. This protects financial institutions from making two payments and thus losing money. There are two types of lost instrument bonds—fixed penalty and open penalty. Fixed penalty bonds are issued for instruments of fixed value, such as checks. Conversely, open penalty bonds are issued for instruments with values that fluctuate, like stock certificates. A variety of financial instruments may be covered under a lost instrument bond.

We Can Help You Find the Right Commercial Bond

There are many different types of commercial bonds, from contractor and construction bonds to court bonds, fiduciary bonds, probate bonds, and license bonds. Determining which bond your business needs can be confusing, especially since requirements vary by industry and jurisdiction.

Our experienced team can help you determine which commercial bond is required and guide you through the application process.