Surety Def: Formal, legally enforceable contract between a first party (the principal or obligor), a second party (the customer or obligee). and a third party (the surety, such as a bank, bonding company, or insurance company) whereby the surety guarantees payment of a specified maximum sum, or to otherwise compensate (indemnify), the obligee against damage or loss caused by the actions (or a failure to perform) of the obligor.

Commercial Bonds

Auto Dealer Bond - A license and permit bond required by many states in order to operate as an auto dealer.

Broker Bond - A vague term used to describe various types of brokers (e.g. freight broker, mortgage broker, etc.)

Cigarette Tax Bond - May be required of cigarette distributors to guarantee payment of taxes.

Contract Bonds

Bid Bond - A guarantee that the bonding company will provide a performance bond If the contractor Is awarded the job.

Maintenance Bond - A contractor bond in force following a performance bond.

Payment Bond - Assures that the suppliers, laborers, and subcontractors will be paid if the contractor defaults.

Court Bonds

Appeal Bond - A bond required by a court prior to an appeal. Appeal bonds always require 100% collateral.

Custodian Bond - Another term used for guardianship bonds.

Estate Bond - Another term used for probate bonds.