The first type of contract surety bond issued is a bid bond. These types of bonds guarantee that the bidder on a contract will enter into the contract and make the required payment after it's entered into. The second type of contract surety bond is a payment bond. This type of bond guarantees payment for anyone who supplies labor, materials, and equipment to a contract.
Performance contract surety bonds guarantee that the contractor will perform the instructions in accordance with the written terms of the contract. Other types of contract surety bonds include maintenance bonds, which guarantee against defective workmanship, and subdivision bonds, which are used to construct city improvements such as streets and sewers.
On the commercial side of the surety bond business, there are many different types of surety bonds available for many different purposes. License and permit bonds are there for firms who need a license or permit to engage in their particular business. Judicial and probate bonds exist for firms who need to comply with court orders. Finally, there are public official and federal bonds, which guarantee the performance by a public official like a court clerk or notary.
By Jamie Ward
