Contract bonds provide financial security on specific contracts by assuring the project owner (obligee) that the contractor (principal) will perform the work and pay certain subcontractors, and or material suppliers.
- Bid bonds: Guarantees the bidder will perform the contract at the amount bid.
- Performance bonds: Guarantees performance of the contract by the principal.
- Performance and Payment bonds: Guarantees payment by the principal to subcontractors, laborers, and suppliers.
Commercial bonds provide assurance that the principal will perform in the manner agreed upon in the bond.
- License and permit bonds: Required by city, county, or state prior to obtaining certain licenses and permits.
- Public official bonds: Guarantees the honest and faithful performance of a public official’s duties determined by law, regulation, or ordinance.
- Probate bonds:/ Guarantees the principal will perform in agreement with a court order.