Are you a trustworthy and financially responsible businessperson? If your business needs a bond, you'll need to prove that you're a good business manager. Businesses require different types of surety bonds to reassure their customers that they are responsible and established organizations.
Here are five of the most common types of surety bonds.
#1: Contract Surety BondsIf you're a contractor who's bidding on large projects, you need to show that you have the organizational capacity and the financial ability to manage these projects and see them through to completion. While contractors may not always be required to carry a surety bond, they may be asked to do so when bidding on government projects and larger projects, or simply when the customer requests them. Getting bonded can increase a contractor's ability to pursue much larger contracts. There are several types of contractor bonds. These include the bid bond, which is a statement that the contractor intends to keep a bid at a certain price and provide other bonds. The performance bond ensures that the contractor will complete the contract. The payment bond reassures workers and suppliers that they will be paid.
#2: Court BondsLegal or related professionals require any number of bonding products for themselves and their clients. For instance, a sheriff requires a bond to confiscate property. Legal clients may request bonds so that they can perform functions such as becoming the executor of an estate. Those who are involved in court cases may also require judicial bonds to ensure payment or ensure that a defendant shows up in court.
#3: Public Official BondsThose who work in the service of the public need to be highly responsible and a public official bond is designed to show that these officials will perform their duties faithfully and well. Tax collectors, judges, notaries, and peace officers are among those who need to have a bond to show that they are of strong character and will perform their duties well.
#4: Business BondsBusiness bonds are quite specific to each state. They ensure that a business is responsible and will fulfill its duties to its clients and to the government through payment of taxes and bills. Diverse groups from beauty pageant operators to used vehicle salespeople require bonds to show that they will operate in a trustworthy and financially responsible manner.
#5: License and Permit Bonds
Business owners and workers may also require a different sort of bond to show that they will abide by the local regulations for those in their field. For example, a plumber needs to be able to abide by local plumbing codes and regulations. A license bond shows that he or she will perform duties in line with these local regulations.