Surety

Contract bonds

This type of surety ensures that contractual agreements are met. 

Contract sureties are commonly used for construction projects.

• Bid Bond: provides financial protection to the principal if a bidder is awarded a contract but fails to sign the contract or provide the required performance and payment bonds.
• Performance Bond: provides an principal with a guarantee that, in the event of a contractor’s default, the surety will complete or arrange completion of the contract.
• Payment Bond: ensures that certain subcontractors and suppliers will be paid for labour and materials incorporated into a construction contract. They are often used alongside contract bonds to secure compensation for all contractors and suppliers against the risk of non-payment. (Rental Bonds, Real Estate Bonds)
• Warranty Bond (also called a Maintenance Bond): guarantees the principal that any workmanship and material defects found in the original construction will be repaired during the warranty period.  

Commercial Surety Bonds

Commercial sureties are often needed by licensed businesses. 

Governments request these sureties to make sure business owners follow codes and regulations.

• License or Compliance Bonds : required by federal, state, or local governments as a condition for obtaining a licence or permit for various occupations and professions. (Environmental bonds, Waste Management bonds, Travel agent, transport bonds)
• Court Bonds (also called judicial bonds): required from a plaintiff or defendant in judicial proceedings to reserve the rights of the opposing litigant
• Tax  Duty Bonds Customs bonds, Excise bonds, VAT bond (Motor Fuel, Alcohol, Tobacco)

Tax duty bonds act as a guarantee to Customs and Excise offices that you will satisfy the local regulations and pay due taxes