Bonds are three party instruments, by which one party (the surety) guarantees or promises a second party (the owner) successful performance by a third party (the contractor or principal). A bond is also an instrument of pre-qualification, whereby one party says to a second party that the third party has been examined and found to be qualified to complete the obligation or undertaking in question.
Find Your Bond
| Bond Name | Actions | Type |
|---|---|---|
| Bid | Apply | Construction |
| Home Improvement/Trade Contractor | Apply | Construction |
| Maintenance | Apply | Construction |
| Performance & Payment | Apply | Construction |
| Site Improvement | Apply | Construction |
| Subdivision | Apply | Construction |
Injunction Bond
This type of bond may be required of law officers who are called upon to execute o writs. Generally, the officers will rely on the plaintiff’s attorney as to what property is subject to seizure. The officers are liable for damages for seizing the wrong property or acting on invalid writs. The bond is for the protection of officers of the court from such damages. If there is a fully adjudged claim that has been reduced to a judgment, the potential liability under such a bond is quite limited. However, if the claim is questionable or the property not clearly identified as to ownership, substantial damages can occur. Sometimes adjoining or other property not belonging to the plaintiff is damaged when the plaintiff’s property is removed.
Attachment Bond
This bond guarantees the payments of costs and damages to property if the applicant is unsuccessful in their court action.
Mechanic’s Lien Bond
This bond guarantees that a mechanic’s lien filed against a property will be discharged and released.
Administration Bond
A bond which is furnished by the executor or administrator of an estate. It guarantees that the estate will be settled in accordance with the terms of the Will, or, if there is no Will, in accordance with the law. It guarantees the fidelity of the executor or administrator.
Preliminary Executor Bond
Person appointed as fiduciary prior to a will being admitted to probate or administration of an estate, with no power to make distribution of estate assets pursuant to the will until such time as the will has been admitted to probate.
Guardian Bond
This bond guarantees faithful performance of the duty of a fiduciary appointed by the court to administer the estate of an incompetent person.
Receiver/Referee Bond
When a petition is filed in bankruptcy, the court will appoint a receiver to look after the bankrupt’s property until there has been a meeting of creditors and a permanent trustee is appointed. This bond covers the faithful performance and accounting of monies in connection with the operation, reorganization and rehabilitation of debtors business.
Trustee Bond
The bond covers faithful performance of the duties of the trustee named in a will – testamentary trustee or covers faithful performance of duty by a person appointed trustee in a bankruptcy proceeding.
Employee Dishonesty Bond
This coverage form covers money, securities and property against loss caused by employee dishonesty. Endorsements can be added to broaden the policy form.
Janitorial Bond
Janitorial Services bond is a bond to protect you and your employees against allegations of dishonesty, theft, disappearance, etc. The employee(s) must be convicted of a crime before coverage will apply.
Stay of Execution Bond
An appellant may, at or prior to, the filing of the notice of appeal, file a supersedes bond in an amount determined under the Statute, which if approved and accepted by the court, shall have the effect of staying execution on the judgment while the appeal is pending. The court may also, at or prior to the filing of the notice of appeal, fix the amount of the supersedes bond by order and allow appellant a reasonable period of time not to exceed thirty (30) days to file the bond, subject to its approval. This means that a bond may be filed in the court after the notice of appeal has been filed and if the court sets the amount of the bond at or before the filing of the notice of appeal.
Appeal Bond
When a judgment or decree has been rendered in one court and the losing party wishes to take an appeal to a higher court, he or she ordinarily must give an appeal bond. The giving of this bond usually prevents the successful party in the lower court from executing on the judgment. Therefore, the appeal bond generally supersedes or takes the place of the judgment. The bond guarantees that the appeal will be prosecuted without unnecessary delay, and if the judgment is affirmed by the Appellate Court, that the principal will satisfy the judgment with interest and costs.
ERISA Bond
This bond provides protection for retirement plans (401K plan, profit sharing, etc.) from losses due to fraud or dishonesty on the part of the person(s) handling the funds. The ERISA requirement is 10% of the plan assets or $500,000 (whichever is less). This bond does not protect the personal assets of the fiduciaries. For fiduciary ERISA coverage see ERISA Fiduciary Liability Policy.
Business Services Bond
Insures against loss of money or other property belonging to a specific client or all clients. The bond contains a conviction clause and the maximum penalty is $250,000.
Third Party Fidelity Bond
Can be written in conjunction with an Employee Dishonesty policy A to extend coverage to a client’s premises. ERISA Fiduciary Liability Policy This bond provides coverage for retirement plans (401K plan, profit sharing, etc.) fiduciaries’ personal assets and legal defense in the event of a claim. This is not an ERISA requirement but strongly recommended — the ERISA bond does not protect the personal assets of the fiduciaries.
ERISA Fiduciary Liability Policy Bond
This coverage form covers money, securities and property against loss caused by employee dishonesty. Endorsements can be added to broaden the policy form.
Lost Instrument Bond
This bond indemnifies the issuer of a duplicate security against claims of anyone claiming to be the owner of the original instrument/security. The instrument/security must be lost at least 60 days. If the lost instrument is a bank or certified check, the check must be missing for at least 60 days before a bond will be issued.
Mortgage Broker Bond
Mortgage broker bonds (also known as mortgage bonds) are license bonds required by state governments. The bond guarantees the mortgage broker (principal) will operate per the rules and regulations of the state licensure code. Each state has its own specific set of laws to abide by.
Therefore, each state requires a separate bond, stating the penalty amount and precisely what statutes are being guaranteed by the bond.
Current Market: Mortgage broker bonds are currently being written at excellent rates for those who qualify. In general, rates are less than other license bond types. However, not all bonding companies are offering lower rates for mortgage brokers.
Mortgage Lender Bond
As a new mortgage lender, there are many things to consider, such as what kind of loans you’ll specialize in, where your office will be, and how to market yourself and get your name into the industry However, there’s another critical issue that you need to consider as you begin establishing your business and its customer base.
Law requires businesses in some industries to secure a surety bond before a state business license can be issued. Mortgage lenders and brokers are required to get a surety bond before obtaining their mortgage broker license, a process that is generally backed by the state department of banking. The bond’s purpose is to ensure the consumer is protected in the event of wrongful practices or fraud on the part of the lender or broker.
Mortgage Loan Originator Bond
A person or entity who assists a consumer in obtaining or applying for a residential mortgage loan by advising on loan terms, preparing loan packages, or collecting information on behalf of the consumer, provides offers and negotiates terms of a residential mortgage loan for compensation or gain.
Alcoholic Beverages, Beer & Liquor Bond
(Permit Bonds) There is great variation from one jurisdiction to the next in the laws applicable to those dealing in alcoholic or intoxicating beverages. In all states, except where beer or liquor is sold by state stores, dealers are licensed. Bonds may be required to simply guarantee compliance with the law and can be written for reputable dealers. In other jurisdictions, the bonds may also guarantee the payment of taxes on beverages sold which makes the bond a good faith and credit guarantee. In still other jurisdictions, the bond guarantees fines or contains forfeiture provisions making the entire penal sum payable if the dealer is convicted of any violations of the law.
Laundry Bond
A business must have a Laundry license if it washes, dries, starches or irons clothes, household linens or other washable fabrics for the public or, if self-service or otherwise, the public may come to the business to wash clothes or other fabrics whether by automatic or coin-operated machines. In order to be licensed, the City requires a business owner to be bonded to ensure he/her are in compliance with the licensing laws when acting in this capacity.
Second Hand Dealer Bond
Dealers of second hand good must be licensed by the Department of Consumer Affairs. To ensure the licensee is in compliance with the licensing laws when acting in this capacity a bond is required by the Department of Consumer Affairs.
Bid Bond
Bid bonds are a financial guarantee by the surety to the obligee, usually the project owner, that the contractor will honor his bid price, enter into a contract and supply the required performance and payment ponds. The bid bond amount is usually 5 to 20% of the bid amount. If the contractor fails to honor his bid or cannot furnish the performance or payment bonds, the surety is liable for the difference between the first and second bidder up to the face amount of the bond.
Performance & Payment Bond
The performance bond guarantees the performance of the contractor, that they will complete the contract at the price stated as per the plans and specifications. If the contractor defaults the surety must step in and complete the project or pay to have it completed up to the bond limits. Most performance bonds are written at 100% of the contract amount and increase with each change order. The cost of the bonds is based on a percentage of the contract amount.
Maintenance Bond
The maintenance (or warrantee) bond is a financial guarantee that the contractor will maintain a project for a specified time after completion. Usually the bond, when required, is written at the same time as the performance and payment pond. The bond is usually written as a smaller percentage of the contract amount, typically 10%.
Site Improvement Bond
This bond guarantees that a developer will properly install improvements affecting public property associated with commercial property belonging to the obligee, in accordance with applicable building codes.
Subdivision Bond
This bond guarantees that a developer will properly improve public property associated with a commercial subdivision belonging to the obligee, in accordance with applicable building codes.
Home Improvement/Trade Contractor Bond
This bond guarantees performance of a contract for construction or repair work and compliance with obligee’s laws and regulations.
Street Obstruction Bond
The City of New York requires a bond when filing a permit for excavation/street opening. Please refer to the NYC-Department of Transportation for details.
Order of Seizure Bond
A drastic but legal preliminary remedy for certain kinds of infringement. A Federal court may order the United States Marshal to confiscate and impound allegedly infringing articles pending trial. Since it may turn out later that the allegation was incorrect, the party seeking seizure must post a bond to protect the party whose items were seized. The remedy may even be granted ex parte in certain circumstances (meaning that the defendant has no chance to oppose the seizure in advance).